Travis... I don't "bet" money on non-productive things. IE, I don't gamble. It's a moral thing.
But, here's why I am saying you're not going to be able to... 1. Over the last 2 decades, industrial finance has been mostly done by direct sales of bonds on the open market. This has fallen almost 90 percent in the last 6 months. 2. Larger and institutional borrowers have been either delaying investments, or paying higher rates to float commercial paper. Recent treasury rates have shown that insitutional investors are willing to pull money from any business venture and buy bonds instead, at LESS THAN 1% rate of return. 3. This has caused the lenders for larger institutions to slow lending. 4. This is going to start cannibalizing the smaller institution's remaining capital, as large companies borrow from, or lease from ever smaller entities, since they're the only ones with any available capital right now. Smaller banks and regional banks are still moderately healthy, but with regulators suddenly breathing down their necks, they're suddenly "risk averse", to try to keep institutional investors from pulling money out and having the regulators start blasting holes in thier portfolios of paper they hold as assets. Rules are, that what that paper can be sold for on the open market, is the value it must be valued at. A grade paper sells at a steep discount. B sells at a severe discount. C or less is is now sold at less than 10% of it's face value. So, even the solvent banks are having to start limiting exposure to anything that even faintly looks "risky". So, you're likely not dealing with any of those. You're likely using a company that was capitalized with cash of investors a number of years ago, owns its own portfolio of paper, and has relatively limited debt. Yes, they're calling and saying "we have money to lend". And they do. But it is quite limited. Once the larger borrowers arrive in that market, it will be sucked up faster than feathers in a hurricane. Due o the shorter term nature of their lending or financing, you'll see a small trickle continue. However, it is also true that the credit standards for even those have run upwards a lot, cutting off smaller and non-established prospective customers like me and most WISP's. They are raising the finacial requirements of who they finance a lot. That's going on considerably and has been for some time. Will your lender or leasing co be able to do anything for you in 6 months? I would not bet the company on it. I absolutely would NOT depend on it for the next 18 months. Re-write your business plan. Have a contingency plan in place. Have one for no credit being available. That's gone from "not thinkable" to "likely" in just 6 months. That's the wiser "bet", by a million times. ++++++++++++++++++++++++++++++++ <insert witty tagline here> ----- Original Message ----- From: "Travis Johnson" <[email protected]> To: "WISPA General List" <[email protected]> Sent: Thursday, January 01, 2009 8:47 PM Subject: Re: [WISPA] Congress may help smaller ISPs grow > We have been charging the same for internet service for almost 5 years.... > and just two days ago, we got double the new sign-ups on a single day of > what we can do for installs. Business is booming in our area and our > industry. Just looking at our 2008 financials, our gross revenues are up > 15.2% and our Net Profit is up 10.3%. > > And I'll take the bet on being able to lease or finance equipment in 6 > months. How much shall we throw on the table? I have lease companies > calling me daily wanting to give me money... seriously... I get 3-4 calls > PER WEEK from all different leasing companies. They all have money and > want "credit worthy" companies to use it, because that's how they make > money. > > So again, how much shall we bet on this? :) > > Travis > Microserv > > [email protected] wrote: > ++++++++++++++++++++++++++++++++ > <insert witty tagline here> > > ----- Original Message ----- > From: "Travis Johnson" <[email protected]> > To: "WISPA General List" <[email protected]> > Sent: Thursday, January 01, 2009 7:24 PM > Subject: Re: [WISPA] Congress may help smaller ISPs grow > > > You can not grow in large scales without financing... and I don't > understand why people are against it. Our last equipment lease was under > 10% interest, no personal guarantees, no money up front. We were able to > purchase a large quantity of CPE units (thus saving us about 20% off the > single unit price). So, in the end, it actually saves money and the "cost" > of installing a new customer is $0 to you, because the $99 installation > fee pays for the time, materials, etc. > > Example: > single CPE = $190 each > 460 CPE = $155 each > > 36 month lease on $71,300 = $2,300 per month x 36 months = $82,800 / 460 > units = $180 each > > But in 36 months, you might be able to charge no more than 10 dollars / > month per customer. That's the magic of deflation - which is already > occurring. > > And it costs you $5 per month for 36 months for the equipment on that > customer... that's pretty cheap even if you only charge $29 per month. :) > > Whatever happens in the future... It will NOT be the same as today. > Inflation or deflation will happen. No way around it. Congress has > already taken on more debt than can be serviced. Neither scenario will > let you survive being in debt. > > Besides, don't expect to be able to lease equipment at any rate or terms > within 6 months. > > > Travis > Microserv > > > > > -------------------------------------------------------------------------------- > WISPA Wants You! Join today! > http://signup.wispa.org/ > -------------------------------------------------------------------------------- > > WISPA Wireless List: [email protected] > > Subscribe/Unsubscribe: > http://lists.wispa.org/mailman/listinfo/wireless > > Archives: http://lists.wispa.org/pipermail/wireless/ > > > -------------------------------------------------------------------------------- > > > -------------------------------------------------------------------------------- > WISPA Wants You! 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