Industry August 25, 2014 By Dave Young, Manager of Ticket Financing, RCN Capital
Cash and cash flow are critical elements to any successful business to include the business of purchasing tickets to sell them across distribution networks for a profit. Ticket Brokers use a variety of tools and methods to finance operations to include self-funding, credit cards, lines of credit, and outside investors. RCN Capital is expanding its product offerings to include a new method for ticket brokers to obtain assistance with cash flow and funding in general.
RCN Capital is helping ticket brokers with cash flow management by providing short term loans using the actual tickets in a given transaction as the collateral for the loan. Typically a traditional financial institution would never consider this given the type of collateral and RCN is able to fill this gap by coordinating with ticket issuing entities and brokers seeking funding. This method of financing can create substantial cash flow flexibility and has the potential to meaningfully increase position sizes given that the approved loan amount is directly linked to the transaction size agreed upon between a broker and a seller.
Loans are less than twelve months in duration, paid back weekly via ACH draws, and a down payment of 25% of the loan is required. RCN Capital works directly with the customer to coordinate with a team or venue to facilitate the transaction, and we can approach any and all ticket issuing authorities with transactions. The organization selling the tickets benefits by receiving full payment immediately while also significantly reducing processing fees. Brokers benefit by improving cash flow flexibility, improving purchasing power, and possibly using added funding to obtain better terms in a transaction.
Recently we saw this in action in one of the four major professional sports leagues. A team was able to receive full payment up front on a large transaction while drastically cutting processing fees compared to taking payments via credit cards. The borrower/broker was able to use enhanced purchasing power to secure favorable terms and emphasis on specific events throughout the season. Working as a team the borrower, team, and RCN Capital were able to make this transaction happen and help both the team and the broker.
Financing ticket purchases using the tickets as collateral is an option brokers can use effectively depending on what their objectives and goals are. RCN Capital is very nimble, creative, and willing to work with all clients to determine if RCN can facilitate a transaction. Interested brokers are encouraged to reach out to RCN Capital with all transactions under consideration to determine if the RCN financing program is a good fit.
Dave Young, Manager of Ticket Financing, manages RCN Capital’s financing program for pre-qualified broker buyers to purchase ticket inventory from teams, universities, and venues. You can reach him at firstname.lastname@example.org, or 860-533-4049.