What collateral is required for Gold Star's lines of credit?
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 two lines of credit with a bank. Both lines of credit are secured using the same type of collateral.
The first line of credit is for $1,750,000. The second line of credit does not have a specified amount, but is specific to capital expenditures.
Both lines of credit are collateralized by a blanket lien on all of Gold Star's general business assets. This means that if Gold Star were to default on either line of credit, the bank would have a legal claim on all of Gold Star's general business assets to recover the outstanding debt. The first line of credit matures in August 2025, while the second line of credit has principal payments of $8,334 due monthly beginning in January 2025, with a balloon payment due upon maturity in August 2028.