Travis,
You are in a very fortunteately situation where you have reached a level, where
you can prove your self credit worthy to their standards.
I even had a conversation with some NY money guys last month, and they are in
big trouble. They are desperately looking for deals. They have all this cash
(billions) and no where to spend it or invest it. But they'd rather sit on the
money, than put it somewhere they feel is not secure. The problem is that most
WISPs don;t get approved for leases as easilly as you do. They get some leases
upfront, until the value of their assets are already overly committed to secure
them, and they get stopped dead on expansion.
What I'd like to see is a SBA Broadband Lease guarantee program, that is easier
to qualify for than traditional SBA guarantees, to help open up lending to the
WISP market. There is tons of money out their, But its harder than said for
most to prove themselves "credit worthy".
I'm seeing high risk lenders being more open to 1 yr leases. But lenders are
still concerned about 3yr leases, when they realize 3 yrs is a long time, and
plenty of time for a WISP to loose their custoemrs to Comcast or FIOS.
Expecially when grant programs are talked about that might subsidize Fiber
Optic deployment growth.
Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless Broadband
----- Original Message -----
From: Travis Johnson
To: WISPA General List
Sent: Thursday, January 01, 2009 11:47 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
rea...@muddyfrogwater.us wrote:
++++++++++++++++++++++++++++++++
<insert witty tagline here>
----- Original Message -----
From: "Travis Johnson" <t...@ida.net>
To: "WISPA General List" <wireless@wispa.org>
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
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