[104544] in North American Network Operators' Group
Re: [NANOG] financing IRU purchase
daemon@ATHENA.MIT.EDU (John Curran)
Sat May 17 11:25:44 2008
In-Reply-To: <471248.65084.qm@web45302.mail.sp1.yahoo.com>
Date: Sat, 17 May 2008 11:24:57 -0400
To: Zitibake <zitibake@yahoo.com>
From: John Curran <jcurran@mail.com>
Cc: nanog@nanog.org
Errors-To: nanog-bounces@nanog.org
At 7:41 AM -0700 5/17/08, Zitibake wrote:
>I'm looking for financing sources to help with the purchase of an IRU within my metro area. I'd be interested in hearing suggestions of how to describe the asset to potential lenders; or in hearing of lenders that are already familiar with IRUs as "attachable assets".
Financing an IRU poses challenges to lenders, since it's a fixed
location asset which they need to remarket in case of business
failure. Heavy equipment (e.g. routers, generators, chillers) can
be moved to where the demand is, but a building or IRU must
have value inherent to the location. Lenders can tap an entire
field of people experienced in providing market demand & valuation
for buildings, but don't have the same available to assist in
determining the inherent value of an IRU in a given location.
I'm not saying it's not possible, just providing some perspective
into the lenders side of the equation. If you've got an existing
operating business, you might have better luck with financing
for business expansion and using the proceeds for the IRU and
related expansion needs. Business valuation for existing firms
with customers and revenue is much lower risk from the lenders
perspective.
In any case, I believe you'll have better chances of success with
finance firms familiar with the telecomm / ISP / CLEC market;
contact me offlist with the general region that you're in, and
I'll send some typical folks for that area.
/John
p.s. Also note that right now is not a great time in the
financial markets, and you may need to modulate
or time your plans accordingly.
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