What condition is Budget's total capacity for debt subject to?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
------------------------------| | Americas – Debt due to Avis Budget Rental Car Funding Americas – Debt borrowings International – Debt borrowings | $ 15,720 1,424 3,031 | 1,160 2,159 | $ 1,577 264 872 99 | | International – Finance leases | $ 242 | $ 17,613 | $ 2,812 | | Other | 8 | | | | Total | $ 20,425 | | |
Capacity is subject to maintaining sufficient assets to collateralize debt. The total capacity for Americas — Debt due to Avis Budget Rental Car Funding includes increases from amendments of our asset-backed variable funding financing facilities, which were most recently amended and extended in December 2024.
The outstanding debt is collateralized by vehicles and related assets of $14 billion for Americas - Debt due to Avis Budget Rental Car Funding; $1.5 billion for Americas - Debt borrowings; $2.7 billion for International - Debt borrowings, and $0.2 billion for International - Debt borrowings, and $0.2 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, and $0.2 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for International - Debt borrowings, $2.7 billion for I
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 79)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the company's debt capacity is contingent upon maintaining sufficient assets to collateralize the debt. For the Americas, debt due to Avis Budget Rental Car Funding includes increases from amendments of their asset-backed variable funding financing facilities, which were most recently amended and extended in December 2024.
As of December 31, 2024, the outstanding debt is collateralized by vehicles and related assets. Specifically, $14 billion is collateralizing Americas - Debt due to Avis Budget Rental Car Funding, $1.5 billion for Americas - Debt borrowings, and $2.7 billion for International - Debt borrowings, and $0.2 billion for International - Debt borrowings.
This indicates that Budget's ability to borrow money is directly linked to the value of its assets, primarily vehicles. If the value of these assets decreases, Budget's borrowing capacity could be reduced. For a prospective franchisee, this highlights the importance of understanding how Budget manages its assets and debt, as it could impact the financial stability of the company and, by extension, the franchise system.