What is the federal insured limit that Cinch I.T.'s cash balances may exceed?
Cinch_I_T Franchise · 2024 FDDAnswer from 2024 FDD Document
. The future impact on the Company's financial position and operating results cannot be reasonably determined at this time.
7. CONCENTRATIONS
Concentration of Credit Risk
The Company maintains its cash balance at a federally insured institution. At times, cash balances may exceed the federal i
Source: Item 23 — RECEIPTS (FDD pages 60–269)
What This Means (2024 FDD)
According to Cinch I.T.'s 2024 Franchise Disclosure Document, the company maintains its cash balance at a federally insured institution. The document states that at times, Cinch I.T.'s cash balances may exceed the federal insured limit of $250,000.
This means that while Cinch I.T. uses a federally insured bank, there may be occasions when the total amount of cash held in the account surpasses the standard insurance coverage provided by the FDIC (Federal Deposit Insurance Corporation). The FDIC typically insures deposits up to $250,000 per depositor, per insured bank.
Cinch I.T.'s management monitors the financial condition of the banking institution and its cash balances in an attempt to minimize potential risk. It is important to note that exceeding the insured limit does not automatically indicate financial instability, but it does expose the company to a potential loss should the bank fail, for the amount exceeding $250,000.