Debt

3 Months Ended

Mar. 31, 2014

Note 5. Debt

Due to Related Parties

From time to time, the Company receives advances from related parties such as officers, directors or principal shareholders in the normal course of business. As of March 31, 2014 and December 31, 2013 the Company owed shareholders and directors $136,373 and $80,728 respectively. The advances are non-interest bearing, unsecured and due on demand.

Due to Third Parties

The amounts due to third parties on a current and noncurrent basis are as follows:

	March 31, 2014		December 31, 2013
Due to third parties - Current	$	28,808	$	20,648
Due to third parties - Non Current		-		19,098
	$	28,808	$	39,746

Auto finance loans, secured loans and lines of credit

A summary of the company’s auto finance loans, secured loans and letters of credit is as follows:

	March 31, 2014			December 31, 2013
Lines of credit	$	521,487		$	530,071
Auto finance loans		216,264			271,387
Secured loans		94,036			99,005
	$	831,787		$	900,463
Less Current Portion		(129,443	)		(151,268	)
Total - Non Current		702,444			749,195

Collateral:

	1.	The Company uses the cars that they buy as collateral to guarantee the auto finance loans, the lines of credit and the secured loans.

	2.	The Company also maintained a compensating bank deposit as collateral with Bank Popular as reflected on the accompanying consolidated balance sheets at December 31, 2013 which was refunded to the Company as of March 31, 2014.

Guarantees:

	1.	Jeremy Harris, CEO of the Company, has personally guaranteed each of the loans.

	2.	Banco Popular auto finance loans and a secured loan is currently being guaranteed by a third party.

	3.	A third party guaranteed the two lines of credit with Bankinter and this party was paid 20% of the common shares of the Company as a fee in the year 2010 and is currently a principal shareholder.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References+ Details

ARROW CARS INTERNATIONAL INC 10-Q