What is the interest rate on the note payable to the Small Business Administration for Brain Balance?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
| | Gross Carrying Amount | | Accumulated Amortization | | Website and development | $ 610,283 | $ | 443,420 | $ 564,860 | $ | 400,601 | $ | 418,681 | $ | 373,996 | | assets | | | | | | | | | | |
Amortization expense for such assets totaled $49,819, $26,605, and $7,327 for the years ended December 31, 2024, 2023, and 2022, respectively.
Note 7 - Long-term Debt
Long-term debt at December 31 is as follows:
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Note payable and accrued interest |
Source: Item 23 — RECEIPTS (FDD pages 72–292)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, the company has a note payable to the Small Business Administration (SBA) with an interest rate of 3.75 percent. This note is associated with accrued interest. The note's monthly interest and principal payments of $731 began in September 2021, and the note is scheduled to mature in September 2050. The note is secured by all of Brain Balance's assets.
For a prospective Brain Balance franchisee, this information provides insight into the financial obligations and debt management of the franchisor. Understanding the terms of the note payable, such as the interest rate and repayment schedule, can help potential franchisees assess the financial stability and long-term financial planning of Brain Balance.
The presence of a secured note payable to the SBA suggests that Brain Balance has utilized government-backed financing, which is a common practice for businesses seeking capital. The fact that the note is secured by all of the company's assets indicates that the SBA has a priority claim on these assets in the event of default. This arrangement is typical in SBA loans and provides the lender with added security. The interest expense for 2024, 2023, and 2022 was $5,988, $5,652, and $5,765, respectively.