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NOTE 7 - LINE OF CREDIT
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9 Months Ended |
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Sep. 30, 2012
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| Debt Disclosure [Text Block] |
NOTE 7
– LINE OF CREDIT
In
October 2011 the Company negotiated a line of credit from a
bank. The agreement included a borrowing base calculation
tied to accounts receivable with a maximum availability of
$750,000. Interest on outstanding balances is payable daily
at an interest rate that is two and three quarter’s
percentage points (2.75%) above the Prime
Rate. The Company’s interest rate was 6% as
of September 30, 2012. The line is collateralized
by substantially all of the assets of the Company and is
guaranteed by the Company’s Chief Executive
Officer. The credit facility required the Company
to pay a monitoring fee of 0.315% of eligible collateral to
be paid monthly. An annual facility fee equal to one percent
(1%) of the Maximum Credit is assessed upon the initial
funding, annually thereafter. The term of the agreement is
for three years and expires in October 2014. At September 30,
2012, the Company was in compliance with the required
financial covenants, the fixed charge ratio and debt to net
worth.
As
of September 30, 2012 the outstanding balance open under this
agreement was $403,008. As of September 30, 2012, the
availability under this line was $346,992.
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