What is the annual interest rate on the installment note payable for Cd One Price Cleaners?
Cd_One_Price_Cleaners Franchise · 2025 FDDAnswer from 2025 FDD Document
the margin loan account was $707,835 at December 29, 2023 ($901,714 at December 30, 2022). The Company transferred in $410,000 and withdrew $396,394 from the brokerage firm account in 2023 (transferred in $1,240,000 in 2022).
6. Note Payable
The Company entered into a $499,900 installment note payable with the United States Small Business Administration dated October 29, 2021, and subsequently modified to borrow an additional $1,500,000 on November 14, 2021. The combined notes are to be repaid in monthly installments of $9,737, including interest at 3.75% per annum on the principal balance outstanding. Interest begins accruing at the inception of the note, but payments of principal and interest commence no later than twenty-four months from the date of the original note. Total interest costs incurred were $75,000 in 2023 and 2022. The Company made payments totaling $97,370 in 2023 (none in 2022) which were applied against the accrued interest. Interest will continue to accrue on the original principal and
Source: Item 22 — Contracts (FDD page 72)
What This Means (2025 FDD)
According to the 2025 FDD, Cd One Price Cleaners has an installment note payable with the United States Small Business Administration. The note, dated October 29, 2021, was subsequently modified on November 14, 2021, to borrow an additional $1,500,000, resulting in a combined note.
The combined notes are to be repaid in monthly installments of $9,737, which includes interest. The annual interest rate on the principal balance outstanding is 3.75%. Interest began accruing at the inception of the note.
Payments of principal and interest commenced no later than twenty-four months from the date of the original note. In 2023, Cd One Price Cleaners made payments totaling $97,370, which were applied against the accrued interest. Interest continues to accrue on the original principal, and future payments will continue to be applied to interest until all past due interest has been paid. After that, monthly payments will be allocated first to interest and then to the principal.