Travis,
I'd agree, except, I'm finding a loan or Line of Credit is as easy to get as a
lease.
When the leasor considers a radio, the opposite of a car, "non-liquidatable",
does the lender really benefit by leasing it instead of lending for it?
Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless Broadband
----- Original Message -----
From: Travis Johnson
To: WISPA General List
Sent: Friday, May 22, 2009 6:04 PM
Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital Availability
The banks can sell a car with little effort. They already have relationships
with dealers and auctions. And often, if the consumer's credit is questionable,
the dealer will guarantee to take the car back if the loan defaults.
Who is going to buy a $10,000 radio that has been repo'd? Even for $5k, I
wouldn't touch it. I'd buy a new radio with warranty, that I know is good and
hasn't been fried or broken.
The banks will never loan on the equipment alone. There is no security
there... but again, why do you need a bank loan for equipment when you can just
lease it and get the same results? Up to 60 months with $1 buyout is the same
as a 5 year bank loan. What's the difference?
Travis
Microserv
Tom DeReggi wrote:
Maybe when talking about CPE.
But what about when one is talking about a $10,000 Part101 radio?
Just like a car, all that the lender should need is to "hold the title" of
the radio until paid off, and get a down payment of $2000 to cover the cost
of tower climber/repo man, and a signed letter of authorization from lanlord
stating the location of the tower gear is installed on and they acknowledge
that the gear is not abandoned equipment. (So it does not automatically
become property of landlord in 4 months, and teh landlord knows the
equipment owner has first rights to the gear).
Think about it... Wouldn't repo costs be reduced when the repo man knows
exactly where to find the radio? A car can easilly be relocated and
hard-to-find, when the owner skips town.
Plus the home likely has an owner with a shot gun or a big dog, which the
tower/MTU likely does not. The MTU building might even have a security
guard to escort teh lender safely to the roof :-)
Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless Broadband
----- Original Message -----
From: "jp" <j...@saucer.midcoast.com>
To: "WISPA General List" <wireless@wispa.org>
Sent: Friday, May 22, 2009 11:13 AM
Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital Availability
In a worse case scenario, a car is probably considerably easier to repo
than the antenna on my roof and radio in my attic. And the car would be
worth a magnitude more money. The installed infrastructure is worthless
if it costs a huge amount to get to it.
On Thu, May 21, 2009 at 07:27:09PM -0400, Tom DeReggi wrote:
I've never found a lender willing to lend against using the in-place used
equipment as colladeral.
It is the biggest double standard.
I find it highly ironic that they'll use a car for colladeral that looses
50% of its value the day it leaves the lot, and has a rate of failure and
risk of damage higher than just about any product on the market, and it
has
a huge cash burn (gas :-). but yet lendors won't put equivellent value on
wireless gear, that holds its value, Ebay boasting easilly 50% after 3-4
years of use, even after fully depreciated.
I'll never understand the lending market.
Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless Broadband
----- Original Message -----
From: <rea...@muddyfrogwater.us>
To: "WISPA General List" <wireless@wispa.org>
Sent: Thursday, May 21, 2009 1:55 PM
Subject: Re: [WISPA] Quesiton on Funding / Financing / Capital
Availability
Answers in-line.
++++++++++++++++++++++++++++++++
<insert witty tagline here>
----- Original Message -----
From: "Charles Wu" <c...@cticonnect.com>
To: "WISPA General List" <wireless@wispa.org>
Sent: Thursday, May 21, 2009 8:49 AM
Subject: [WISPA] Quesiton on Funding / Financing / Capital Availability
With all the hype being generated by the stimulus bill, we have been
approached by a multitude of third party financial organizations that
have
a renewed interest in potentially financing rural broadband...now,
specifically, for WISPs, in the past, equipment leasing has been a
very
popular option for financing, but in looking at our numbers over the
past
year, I've noticed a marked decline in the amount of leasing that we
do -
that said, I have the following questions for the listserv about
financing
Assuming that WISPs are still need to buy equipment...
1. Are you able to just purchase equipment out of cash-flow
organically
generated from operations
Other than originally starting with our own personal seed money,
that's
what
we've done.
2. Have you gone to more traditional forms of money (e.g., bank / SBA
/
RUS loans)?
I could not qualify for any of them.
3. Are you doing more vendor leasing programs (e.g., Motorola 3%
financing
deal)
Never sought any.
4. Have you not been able to borrow money due to the credit crunch
(e.g.,
not deploying as aggressively)
My corporation hasn't ever been able to obtain hard money credit.
In
fact, the "credit crunch" start last Fall raised my "30+ day past due"
amount from a piddly $1200 to at one time to almost $13,000 in just
four
months. That almost put us under, and we're still barely scraping by
until
our seasonally variable cash flow revives come August, with still
several
thousand on the books that's very slowly getting chipped away at.
5. Are you holding off on deployments because of the economy
No, we're holding off due to lack of cash flow. We have plenty of
people
waiting for us to build infrastructure out to them.
6. Have you gone to Agility...<cough> Louie the loanshark =)
After much discussion, being some of the first people Agility
contacted,
we
have not done any business with them. In my estimation, they wanted
control over our business and day to day decisions, which we concluded
was
both unwarranted and unwise.
Or any other thoughts / comments on this topic?
WISP equipment is not really a "commodity" in that there is almost no
market
for it outside of the "maker-vendor" relationship. Other than Ebay,
and a
couple of people who attempt to do it piecemeal, there is no "market"
which
stabilizes the value of used equipment, making them a commodity you can
borrow against.
Perhaps it would be more useful, if vendors had the ability to get
capital
and create stable working and short term credit relationships with
their
buyers, kind of like the used car market.
-Charles
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Jason Philbrook | Midcoast Internet Solutions - Wireless and DSL
KB1IOJ | Broadband Internet Access, Dialup, and Hosting
http://f64.nu/ | for Midcoast Maine http://www.midcoast.com/
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