Note 4 - Credit Facilities

3 Months Ended

Mar. 31, 2015

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

4.          Credit Facilities

Sterling Credit Facility:

SGRP and certain of its US and Canadian subsidiaries, (namely SPAR Marketing Force, Inc., SPAR National Assembly Services, Inc., SPAR Group International, Inc., SPAR Trademarks, Inc., SPAR Acquisition, Inc., SPAR Canada, Inc. and SPAR Canada Company) (together with SGRP each a "Borrower"), are parties to a Revolving Loan and Security Agreement dated as of July 6, 2010, as amended in (as amended, the "Sterling Loan Agreement"), with Sterling National Bank (the "Lender"), and their Secured Revolving Loan Note in the amended maximum principal amounts of $7.5 million (see below) to Sterling National Bank (as amended, the "Sterling Note"), to document and govern their credit facility with the Lender (including such agreement and note, the "Sterling Credit Facility"). The Sterling Credit Facility currently is scheduled to expire and the Borrowers' loans thereunder will become due on July 6, 2016 (with no early termination fee).

The Sterling Loan Agreement currently requires the Borrowers to pay interest on the loans thereunder equal to the Agent's floating Prime Rate (as defined in such agreement) minus one half of one percent (1/2%) per annum, and a fee on the maximum unused line thereunder equal to one-eighth of one percent (0.125%) per annum.

Revolving Loans of up to $7.5 million are available to the Borrowers under the Sterling Credit Facility based upon the borrowing base formula defined in the Sterling Loan Agreement (principally 85% of "eligible" US and Canadian accounts receivable less certain reserves). The Sterling Credit Facility is secured by substantially all of the assets of the Borrowers (other than the Company's non-Canadian foreign subsidiaries, certain designated domestic subsidiaries, and those subsidiaries' respective equity and assets). The Sterling Credit Facility amendment dated July 1, 2013 eliminated the requirement for a "closed lock box" account with Sterling so that collections are no longer used to automatically pay down the loans under the Sterling Credit Facility and that account is no longer used. Therefore, the Sterling Credit Facility is now classified as long term debt.

The amendment to the Sterling Credit Facility effective as of July 1, 2014, among other things, extended the scheduled term of the Sterling Credit Facility to July 6, 2016 (with no early termination fee), increased the maximum principal amounts of Sterling's Commitment under the Sterling Loan Agreement to $7.5 million, and provided for the amendment and restatement of the Sterling Note with a new $7.5 million note from the Borrowers in replacement of the old notes.

The Sterling Loan Agreement contains certain financial and other restrictive covenants and also limits certain expenditures by the Borrowers, including, but not limited to, capital expenditures and other investments. At March 31, 2015, the Company was in compliance with such covenants.

International Credit Facilities: 

SPARFACTS Australia Pty. Ltd., has a secured line of credit facility with Oxford Funding Pty Ltd. for $1.2 million (Australian) or approximately $900,000 (based upon the exchange rate at March 31, 2015). The facility provides for borrowing based upon a formula, as defined in the agreement (principally 80% of eligible accounts receivable less certain deductions). The agreement is on a month to month basis at the Company's request. The outstanding balance at March 31, 2015, was approximately $553,000 (Australian) or $426,000 (based on the exchange rate at March 31, 2015).

On March 7, 2011, the Japanese subsidiary, SPAR FM Japan, Inc., a wholly owned subsidiary, secured a term loan with Mizuho Bank in the amount of approximately 20.0 million Yen (Japanese) or $168,000. The loan is payable in monthly installments of 238,000 Yen or $2,000 at an interest rate of 0.1% per annum with a maturity date of February 28, 2018. The outstanding balance at March 31, 2015, was approximately 8.3 million Yen or $70,000 (based upon the exchange rate at March 31, 2015).

The China Unilink subsidiary secured a loan with China Construction Bank in the amount of 1.4 million Chinese Yuan Renminbi or appoximately $229,000 (based on the exchange rate at March 31, 2015). The loan is collateralized with the personal property of one of the minority shareholders of Unilink. The loan has an interest rate of 7.2% per annum and a maturity date of February 11, 2016, at which time the full amount outstanding is to be paid in full. The full amount was outstanding as of March 31, 2015.

Summary of Company Credit and Other Debt Facilities (dollars in thousands):

	March 31, 2015		Interest Rate1		December 31, 2014		Interest Rate2
Credit Facilities Loan Balance:
United States	$	5,354		2.8%	$	5,804		2.8%
Australia		426		6.7%		406		7.1%
China		229		7.2%		228		7.2%
	$	6,009			$	6,438
Other Debt Facility:
Japan Term Loan	$	70		0.1%	$	75		0.1%

	March 31, 2015		December 31, 2014
Unused Availability:
United States	$	1,574	$	1,696
Australia		497		573
	$	2,071	$	2,269

(1)      Based on interest rate at March 31, 2015

(2)      Based on interest rate at December 31, 2014

Management believes that based upon the continuation of the Company's existing credit facilities, projected results of operations, vendor payment requirements and other financing available to the Company (including amounts due to affiliates), sources of cash availability should be manageable and sufficient to support ongoing operations over the next year. However, delays in collection of receivables due from any of the Company's major clients, or a significant reduction in business from such clients could have a material adverse effect on the Company's cash resources and its ongoing ability to fund operations.