Charles, yeah, thats the problem.... In these loans, the product being bought is a large part of the colladeral securing the loan. Banks dont have a problem using land, and Physical infrastrucure like buildings or towers purchased as colladeral. I'm guessing they are not likely to approve a transaction that was primarilly wireless gear, because the pruchased product would not be looked at as safe colladeral. (unless borrower was heavilly coladeralized). If the loan was granted, then the borrower would have a high dollar liabilty on their personal report, possibly making it harder to obtain future fnancing for things like operating capitol. I'm finding there are tons of programs for everything except what we actually need. AKA a small loan for wireless gear, without overly burdening the borrower with large debt, that can be expanded on every 3-5 months or so as borrower learns what they need that specific time period. I hate having to forcast what gear I might need one year in advance, half of it could end up just sitting on the shelf, or making it harder to save the cash for the product you end up needing.. Unfortuntately, basic Fixed Rate Line of Credits are the hardest type of financing to get. :-(
However, for your intended use, as you explained it, what a wonderful program! I can see how it could benefit many Rural WISPs, if they took advantage of it.. Tom DeReggi RapidDSL & Wireless, Inc IntAirNet- Fixed Wireless Broadband ----- Original Message ----- From: "Charles Wu" <c...@cticonnect.com> To: "WISPA General List" <wireless@wispa.org> Sent: Saturday, June 05, 2010 8:04 PM Subject: Re: [WISPA] Leasing Companies > I'm using this money to buy hard assets -- e.g., > land/tower/infrastructure - there are some radios / routers / backhauls in > it, but that's probably less than 20% of the total amount > > These also ARE NOT working capital loans, and I doubt it would cover a > spectrum lease > > The way it works is your bank puts in 50%, the CDC (via the SBA) puts in > 40%, and you put in 10% > > The bank takes the first lien and the SBA takes a subordinate position > > Say you take a loan for $100k > > You'll put down $10k, the bank puts up $50k and the SBA puts up the > remaining $40k > > In the event of default, the bank liquidates your assets...as long as the > assets can be liquidated for at least $50k, the bank is whole > > We're using this money mostly for towers to reduce operating expenses > (e.g., where I might pay $1,000 / month for tower rent, I now go spend > $80k to go buy something...my monthly payment on that over a 10 year > amortization comes out to about $750 / month, so I'm actually $250 / month > ahead and now I can put whatever I want on it =) > > Then, sometimes you strike gold and get an unexpected call from US > Cellular who's willing to pay $1-2k / month to put their stuff on your > tower =) > > -Charles > > -----Original Message----- > From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On > Behalf Of Tom DeReggi > Sent: Saturday, June 05, 2010 4:40 PM > To: WISPA General List > Subject: Re: [WISPA] Leasing Companies > > Charles, > > Thanks for the Info/Link. > > In 2009, SBA had a great program based on a ARRA program, for a basic > small > business loan for any purpose. > They were increasing the SBA guarantee to 90% of loan value (instead of I > think it used to be 80% or less). > That made it way easy to obtain a bank loan, with only 10% down, because > it > was 100% risk-free for the bank. But lke any government program lots of > paperwork was required. Unforunteately, I did not learn about it until > last > few weeks of December 2009, and I was not able to compelte all teh > requirements in time to submit an application. In 2010, that program > expired. :-( > > The CDC program link you attached, inferred it could be 100% guaranteed by > SBA. Wow. But trying to find the catch, of what would disqualify someone? > > For example..... > > "The CDC/504 loan program is a long-term financing tool for economic > development within a community. " > > So what qualifies as Economic development? Does this mean that a plan need > to be pre defined for loan proceeds to apply to equipment to be used only > in > the one specific Area/Community, that meets an specific economic profile? > For example, If I cover 10 cities, that are of average national economic > middle class or higher, and just need money to expand where ever orders > may > come in, would that be disqualified from this type loan program? > > "The 504 Program provides small businesses requiring "brick and mortar" > financing with long-term, fixed-rate financing to acquire major fixed > assets > for expansion " > > So it would cover Radios, but not Spectrum leases? > > " A Certified Development Company (CDC) is a private, nonprofit > corporation > set up to contribute to the economic development of its community. CDCs > work > with SBA and private sector lenders to provide financing to small > businesses" > > "The maximum SBA debenture is $2.0 million when meeting a public policy > goal. " > > Does that mean you must get an indorsement from the local government for > them to say that you are meeting a specific need? > >> a business must create or retain one job for every $65,000 > > Doesn't sound to hard to justify, for people already with a large number > of > employees. But that could be a problem for a 2 man company. They'd have > to > match the equipment loan 30-50% with payroll, likely money they dont have > in > advance of increasingsales after equipment was deployed. Wondering if > they'd except "forcasted Jobs". > > Although, "Loans cannot be made to businesses engaged in speculation" does > not support that. > > > > > Tom DeReggi > RapidDSL & Wireless, Inc > IntAirNet- Fixed Wireless Broadband > > > ----- Original Message ----- > From: "Charles Wu" <c...@cticonnect.com> > To: "WISPA General List" <wireless@wispa.org> > Sent: Saturday, June 05, 2010 9:36 AM > Subject: Re: [WISPA] Leasing Companies > > >> While leasing is a viable option, I would seriously take a look at the >> programs the SBA has to offer >> >> I'm in the process of finalizing an SBA 504 loan for $400k >> >> You need to put down 10%, but if that's not a problem, it's perfect for >> this space as it specifically deals with hard asset acquisition >> >> With the stimulus bill waiving the standard 2% SBA processing fee, it's a >> pretty good deal >> >> All in, I'm looking at 1% for closing costs and a 10 year note at 4.43% >> >> Details here: >> http://www.sba.gov/financialassistance/borrowers/guaranteed/CDC504lp/index.html >> >> -Charles >> >> -----Original Message----- >> From: wireless-boun...@wispa.org [mailto:wireless-boun...@wispa.org] On >> Behalf Of Joe Laura >> Sent: Saturday, June 05, 2010 1:06 AM >> To: WISPA General List >> Subject: Re: [WISPA] Leasing Companies >> >> If you have a good business plan your probably better off dealing with a >> local bank IMO. If you cant convince the bank your business plan is good >> then something might be wrong with your business plan. We do out of >> pocket >> now but several years ago after showing the bank our business plan they >> gave >> me whatever I wanted as long as I showed them my MRC. Joe Laura >> >> >> ----- Original Message ----- >> From: "David" <ad...@speedyquick.net> >> To: "'WISPA General List'" <wireless@wispa.org> >> Sent: Saturday, June 05, 2010 12:52 AM >> Subject: Re: [WISPA] Leasing Companies >> >> >>> Both CTI and Boun at doubleradius can help get you with honest leasing >>> companies. >>> >>> David >>> >> >> >> -------------------------------------------------------------------------------- >> WISPA Wants You! 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