On what basis is the interest computed and accrued for the Tempe Loan for Bw Premier Collection?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
November 30, 2024
The interest rate on the Tempe Loan is a fixed annual rate of 3.50% and is computed and accrued on an ACT/360 basis. The Tempe Loan is secured by, among other things, the Deed of Trust and is guaranteed by the Company.
The Company had borrowed $15.3 million and $15.2 million as of November 30, 2024 and 2023, respectively. The current portion of $0.4 million and $0.4 million is included in accounts payable and accrued liabilities and $14.5 million and $14.8 million is included in non-current construction loans in the Consolidated Statements of Financial Position for the years ended November 30, 2024 and 2023, respectively.
Source: Item 23 — Receipts (FDD pages 54–203)
What This Means (2025 FDD)
According to Bw Premier Collection's 2025 Franchise Disclosure Document, the interest on the Tempe Loan is calculated using a fixed annual rate of 3.50%. The interest is computed and accrued on an ACT/360 basis. This means that the interest is calculated based on the actual number of days in the year (ACT) divided by 360 days.
This method, ACT/360, is a specific way of calculating interest accrual. It assumes every year has 360 days for calculation purposes, regardless of whether it is a leap year or not. This can slightly affect the amount of interest paid over the life of the loan compared to other calculation methods like ACT/365.
The Tempe Loan is secured by a Deed of Trust and guaranteed by the Company. As of November 30, 2024, the company had borrowed $15.3 million. The loan's terms also require Bw Premier Collection to maintain certain financial and operational covenants, ensuring the company remains in good standing with the lender.