What is the interest rate on the Small Business Administration note payable for Hyper Kidz?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
igations satisfied through the | | | | | | | | passage of time | | 14,063 | | 4,279 | | 3,950 | | Total revenues | $ | 139,805 | $ | 100,370 | $ | 70,037 |
NOTE 3 – NOTE PAYABLE
Notes payable consist of the following at December 31,
| 2023 | 2022 | |
|---|---|---|
| Note payable with the Small Business Administration |
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, the company has a note payable with the Small Business Administration (SBA). The interest rate on this note is 3.75%. The face amount of the note is $79,000, and it is payable in 360 monthly installments of $407, which includes the interest. The final payment for this note is due on September 21, 2050, and it is collateralized by the assets of the company.
For a prospective Hyper Kidz franchisee, this information provides insight into the financial obligations and debt management of the company. Understanding the terms of existing loans, such as the SBA note, can help potential franchisees assess the financial stability and practices of the franchisor. It's important to note that this specific loan is held by the company itself (Boomerang Franchise, LLC) and not directly by franchisees.
While this information pertains to the franchisor's financial obligations, it's common for franchisees to also seek SBA loans or other financing options to start their own Hyper Kidz franchise. Interest rates and terms for franchisee loans would depend on individual creditworthiness, the lending institution, and prevailing market conditions at the time of borrowing. Therefore, this information is useful for benchmarking but not directly applicable to franchisee financing.
Prospective franchisees should consult with financial advisors to explore their financing options and understand the terms and conditions of any loans they may seek to fund their Hyper Kidz franchise. Understanding the franchisor's debt obligations, as disclosed in the FDD, is a part of a comprehensive due diligence process.