Market Discussions

Old loan request thread: https://forums.eveonline.com/default.aspx?g=posts&m=1082049#post1082049

Update: completely filled

We just got a massive boost to production and are sitting at about 120 T1 slots and 10 T2 slots, but many are left unfilled and we are trying to fill them with rig production and external orders. We are also trying to start up our PI again.

Our current assets are: 1.3B owed upon completion of manufacturing job, freighter worth 1.4B, about 3.8B cash/sell orders, large POS with many assembly arrays and labs (total about 700M in the POS). Total about 7.2B overall.

Current liabilities: 1B loan @ 10% interest, uncollateralized (lender is not concerned about our taking additional debt); have to PLEX this account @ 0.5B

Net: 5.7B. Over 8 days we've earned 1.8B.

The loan would go towards:
1.5B: 24 hour deposits of PI @ 50M/day (over several characters; doing two tiers of manufacturing ending with the highest level; stable market if flexible about what's produced)
1.5B: T2 rigs having 10 in production and 10 for sale at once (may look for retailer for faster turnover)
2B: miscellaneous rig production for us or build slots for external orders (have many offers but can't do anything without more cash)

The PI alone would pay the interest on this for 30 days in only 10.

We would want a rolling option unless in a month we somehow reach a size where our money isn't being used.

Another thing is that all orders are now 50% prepaid regardless of "flake" status, so they should all be secure now.

If you want more info, let me know.

(By the way, definitely accepting smaller loans. T2 rigs will have highest preference.)

your looking for a massive expansion little over a week after your last loan isnt very smart. almost seems like your trying to get the isk to cover the first loans amount + interest by taking out another larger loan.

I did include a link to the previous loan request as well as mentioning it among our liabilities.

Yeah, it's a large loan request, we don't need the full 5B though. But we could utilize it. We're at a point where we have the tools (production alts getting trained, T2 skills on one character being completed, assembly arrays, freighter) and the time (semester's ending) to make a large expansion work.

Once I'm home I'll post a screenshot of total assets, though unfortunately we just bought for a build. I suppose we can put all the goods and the freighter in a corp hangar and screenshot it with the wallet. I'll also get the current big customer owing 1.3B to post here. Would that work? It'd definitely demonstrate that we have the ISK to cover a 1.1B loan repayment. Since there's always money going in and out I'm not sure how to clearly demonstrate daily revenue, though.

Here are screenshots of our wallets and sales and our current assets.

http://img829.imageshack.us/img829/5701/20120413231549.jpg

http://img16.imageshack.us/img16/232/20120413231704.jpg

They currently add up to about 4.7B. So you can see, we're not trying to fill a 1.1B payment. We're also reasonably large without the loan and aren't getting on over our heads. I wish I had a screenshot of before I got the 1B loan.

To clarify, the 1.3B owed us is actually 2.6B order with a 1.3B advance.

Er, it's a fraction of our assets, a lot of what's currently for sale. I was waiting for a higher price but that does not seem rational as we're definitely losing on opportunity value now (I was expecting them to increase faster, I guess? I'm not sure what I was thinking). They're not the greatest bang for the buck, we're focusing on higher margin items.

1B received.

Terms: 10%/month, interest paid on the 14th (mountain time), repaid before applying for further bonds

There was no struggling, it was a poor economic choice. The price of Tornadoes fluctuates substantially but didn't rise fast enough to justify sitting on the Tornadoes, as I was doing.

25% is not 95%.

BPOs are often a poor choice and end up with you trapped in a market that you shouldn't be in. At current profit levels it's really hard to justify a 750M investment that's worth 12M/day (the cost of 8 runs of Tornado BPC)

Cost of 8 BPCs a day: 12M
Cost of 1 BPO: 750M
Daily profit as a proportion of assets when that makes sense: 0.016. If we earned 1.6% of my assets per day then a Tornado BPO would make sense. We make several times that. The opportunity cost of a BPO often exceeds the accounting cost of a BPC, this is one such case.

There's nothing aimless about my activities though I respond as the market shifts rather than investing heavily in something.

BPCs work fine for Tornadoes, and most other things. And I'm in several markets, including rigs which have a very low set-up cost and BPO investment (and even then, BPCs make good sense at 3k/unit!). And selling things to you in massive quantities.

Yes, I would say that BPCs are fine too, but I say that as a marketeer not as a manufacturer so pinch of salt and all that.

I can confirm that you've done a good job manufacturing goods for me so far [now I've realised that you're Aurel Svenson's corp-mate!] and I hope you get your expansion up and running. If you send me a full API for yourself and Aurel I will run a private audit on you and consider increasing my exposure by one or two billion.


However, I do have concerns with your current finance model. Raising loans is fine for expanding but it is a much more sensitive issue to take advance payments from traders. This model makes it all too easy for potential scammers as it is possible to go to a whole bunch of traders and take advance payments from them [without telling them that you already have advance payments from other traders], then default on the whole lot, taking the deposits and 5 bil loan isk in one swoop.

So my question is how essential are these advance payments to your business model? Could you replace them with something more secure such as a deposit to a third-party [to be forfeited if the order is cancelled]?