What collateral is required for the Closet Storage Concepts note payable to Bank of West?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
included on the balance sheet as of December 31, 2024, in the amount of $413,641, which is comprised of the credit receivable only.
NOTE 12 SUBSEQUENT EVENT
The Company borrowed $130,000 under a loan agreement with a bank on January 23,
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 59)
What This Means (2025 FDD)
Based on the 2025 Closet Storage Concepts FDD, there is no mention of a note payable to Bank of West. However, there is a reference to a loan agreement with a bank.
Specifically, on January 23, 2025, Closet Storage Concepts borrowed $130,000 from a bank. The loan carries an interest rate of 6.74% and is structured to be repaid over five years. The monthly installments are $2,564, starting in February 2025.
This loan is collateralized by all of Closet Storage Concepts' assets. This means that if Closet Storage Concepts defaults on the loan, the bank has a legal claim to the company's assets to recover the outstanding debt. As the FDD does not specify which bank provided the loan, a prospective franchisee should inquire with the franchisor to confirm the bank's name and the specific assets that are pledged as collateral.