How is the interest rate on the Denver Loan calculated for Bw Premier Collection?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
The interest rate on the Denver Loan is a fixed annual rate of 3.21% and is computed and accrued on an ACT/360 basis. The Denver Loan is secured by, among other things, the Deed of Trust and is guaranteed by the Company.
In March 2020, Denver 3560 entered into an initial Construction Loan Agreement (the "Denver Loan") with UMB Bank, which allowed Denver 3560 to request advances up to $21.6 million. In July 2021, this Denver Loan was modified to increase the availability of loan advances from $21.6 million to $24.4 million. For the period May 1, 2020 through April 1, 2023, interest on the outstanding principal balance of the Denver Loan was due and payable monthly. Beginning April 1, 2023, through the maturity date of March 11, 2027, principal and interest are due and payable in an amount determined by UMB to be sufficient to amortize the outstanding principal balance of the Denver Loan over a twenty-five (25) year period. The outstanding principal balance of this Denver Loan is due and payable on the maturity date.
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 rate on the Denver Loan is a fixed annual rate of 3.21%. This rate is computed and accrued on an ACT/360 basis. The loan is secured by a Deed of Trust and guaranteed by the Company.
In March 2020, Denver 3560 entered into an initial Construction Loan Agreement (the "Denver Loan") with UMB Bank, which allowed Denver 3560 to request advances up to $21.6 million. In July 2021, this Denver Loan was modified to increase the availability of loan advances from $21.6 million to $24.4 million. For the period May 1, 2020 through April 1, 2023, interest on the outstanding principal balance of the Denver Loan was due and payable monthly. Beginning April 1, 2023, through the maturity date of March 11, 2027, principal and interest are due and payable in an amount determined by UMB to be sufficient to amortize the outstanding principal balance of the Denver Loan over a twenty-five (25) year period. The outstanding principal balance of this Denver Loan is due and payable on the maturity date.
This means that for a Bw Premier Collection franchisee, the interest calculation for the Denver Loan is based on a fixed annual rate, providing predictability in borrowing costs. The ACT/360 basis indicates how the interest is accrued daily, using the actual number of days in a month and a 360-day year. The loan's security through a Deed of Trust and the Company's guarantee add layers of assurance for the lender. The loan was modified in July 2021 to increase the availability of loan advances from $21.6 million to $24.4 million. The loan has a maturity date of March 11, 2027, and principal and interest are due and payable in an amount determined by UMB to be sufficient to amortize the outstanding principal balance of the Denver Loan over a twenty-five (25) year period.