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Notes Payable
9 Months Ended
Sep. 30, 2019
Debt Disclosure [Abstract]  
Notes Payable

NOTE 3 – NOTES PAYABLE

 

Sterling National Bank

 

On September 8, 2010, in order to fund increasing accounts receivables and support working capital needs, Capstone secured a Financing Agreement from Sterling Capital Funding (now called Sterling National Bank), located in New York, New York, whereby Capstone receives funds for assigned retailer shipments. The assignments provide funding for an amount up to 85% of net invoices submitted.

 

There is a base management fee equal to 0.30% of the gross invoice amount. The interest rate of the loan advance is 0.25% above Sterling National Bank's Base Rate which at time of closing was 7.00%. As of September 30, 2019, and December 31, 2018, the interest rate on the loan was 7.25% and 7.25%, respectively. The amounts borrowed under this agreement are due on demand and collateralized by substantially all the assets of Capstone.

 

Processing fees associated with the agreement for the three months were $16,464 and $19,263 and $36,692 and $39,880 for the nine months ended September 30, 2019 and 2018, respectively.

 

On July 20, 2018, Sterling National Bank expanded the credit line up to $10,000,000 of which $2,000,000 had been allocated as a Capstone expansion working capital line.

 

On July 18, 2019, Sterling National Bank renewed the credit line up to $7,500,000 to June 30, 2020. Additional expansion of the line will be reviewed as the need arises.

 

As of September 30, 2019, and December 31, 2018, there was no balance due to Sterling National Bank.