What is the interest rate per year on the $25,000 note payable with a member for Bambu?
Bambu Franchise · 2025 FDDAnswer from 2025 FDD Document
17,783 | | 2028 | | 22,139 | | 2029 | | 27,451 | | Thereafter | | 74,584 $ 220,329 | | | | |
NOTE 5-NOTES PAYABLE-MEMBERS
Notes payable - members consist of the following at December 31,
| 2024 | 2023 | |
|---|---|---|
| Note payable with managing member. Face Amount | $ 247,933 | $ |
| $250,000 interest at 10% per year, payment in | ||
| 84 | ||
| installments of $4, 150. Not collateralized. | ||
| Note payable with member. Face Amount $25,000 interest | 24,677 | |
| at 10% per year, payment in 36 installments of $581 on a | ||
| 60 month amortization schedule. Uncollateralized. | 272,610 | |
| Less current maturities | (30,280) | |
| $ 242,330 | $ | |
| The |
Source: Item 23 — Receipts (FDD pages 52–209)
What This Means (2025 FDD)
According to Bambu's 2025 Franchise Disclosure Document, a note payable with a member has a face amount of $25,000. The interest rate for this note is 10% per year. Payments are structured in 36 installments of $581, based on a 60-month amortization schedule. This note is uncollateralized, meaning it is not backed by any specific assets.
For a prospective Bambu franchisee, this information is relevant as it provides insight into the company's financing arrangements. Understanding the terms of notes payable, such as interest rates and payment schedules, can help franchisees assess the financial health and stability of the franchisor. The fact that this particular note is with a member of the company suggests a close relationship between the company and its members, which could be a positive sign of internal support.
The 10% interest rate on the $25,000 note is a key detail. Franchisees should consider this rate in the context of prevailing interest rates and other financing options available to Bambu. The payment structure of 36 installments of $581 on a 60-month amortization schedule indicates that the loan is structured to be paid off relatively quickly. However, the amortization schedule extends beyond the payment period, which means that the final payments will be larger to cover the remaining principal and interest.
Finally, the fact that the note is uncollateralized could be seen as both a risk and a benefit. It means that the lender does not have a specific claim on any of Bambu's assets in the event of default, which could increase the risk for the lender. However, it also means that Bambu does not have to pledge any of its assets as security, which could provide more flexibility in managing its finances.