What is the amount of Gold Star's first line of credit with the bank?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
and | No Registration | | Minnesota | No Registration | | New York | No Registration | | North Dakota | No Registration | | Rhode Island | No Registration | | South Dakota | No Registration | | Virginia | No Registration | | Washington | No Registration | | Wisconsin | No Registration | Amortization of these costs was $13,492, $13,146, and $12,973 for the years ended December 31, 2024, 2023, and 2022, respectively. Estimated amortization for the subsequent five years and thereafter is as follows:
| 2025 | $ 13,493 | |------------------------------|--------------| | 2026 | 13,493 | | 2027 | 13,493 | | 2028 | 13,493 | | 2029 | 13,493 | | Thereafter | 8,993 | | | $ 76,458 | In accordance with Accounting Standards Update (ASU) 2015-03 Subtopic 835-30, these costs are now shown on the consolidated balance sheets as a reduction of the loans to which they apply.
NOTE 10 - LINES OF CREDIT
The Company has a $1,750,000 line of credit with a bank. This line of credit is collateralized by a blanket lien on all of the Company's general business assets and charges interest at the Term Secured Overnight Financing Rate (SOFR) plus 2.20% (the Term SOFR was 4.49% at December 31, 2024). The amount utilized was $-0-, $92,581, and $
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, the company has a $1,750,000 line of credit with a bank. This line of credit is secured by a blanket lien on all of Gold Star's general business assets. The interest charged is the Term Secured Overnight Financing Rate (SOFR) plus 2.20%. As of December 31, 2024, the Term SOFR was 4.49%.
The amount utilized from this line of credit was $-0- as of December 31, 2024, $92,581 as of December 31, 2023, and $1,681,630 as of December 31, 2022. This line of credit matures in August 2025 and is subject to certain financial covenants, which were either waived or met at the end of 2024.
Gold Star also has another draw line of credit with the same bank specifically for capital expenditures. This second line of credit is also collateralized by a blanket lien on all of the company's general business assets and charges interest at the Term Secured Overnight Financing Rate (SOFR) plus 2.35%. As of December 31, 2024, the Term SOFR was 4.49%. The amount utilized from this line of credit was $1,500,000 as of December 31, 2024, $802,996 as of December 31, 2023, and $-0- as of December 31, 2022. Principal payments of $8,334 are due monthly beginning in January 2025, with a balloon payment due upon maturity in August 2028. This line of credit is also subject to certain financial covenants, all of which were either waived or met at December 31, 2024.
For a prospective franchisee, understanding these lines of credit is crucial as it reflects Gold Star's financial management and obligations. While these are corporate-level debts and not directly the franchisee's responsibility, they provide insight into the financial health and stability of the franchisor, which can indirectly impact the support and resources available to franchisees.