By: Dave Young, RCN Capital
The efficient use of leverage can lead to robust return on investment for ticket brokers employing leverage when attacking the right opportunities. The cost of this leverage of course impacts overall ROI and decision making, but there is a distinct possibility the presumed cost by some is not as high as perceived. This recent piece outlines the true interest cost when using Ticket Financing at RCN Capital. A review of this previous article explains in detail how the total interest cost on a relative percentage basis is far less than the APR.
Clients of the Ticket Financing program at RCN Capital continue to achieve excellent results when working with Ticket Financing and using leverage. Additionally, the Ticket Financing program gives clients the ability to react quickly and with substantial funds. To wit, one large broker client working with RCN for a few years offers the following: “RCN has granted our company the ability to go after big events on short notice that we would have otherwise had to sit on the sideline for.” Moving quickly with levered funds can also generate outsized gains. This same client adds the following: “We have had multiple events with immediate 80-90% return that we were able to turn in a week that was only made possible by RCN.” Ticket Financing products such as Line of Credit – Equity, Line of Credit – Unsecured, and PSL Financing can help clients establish lines to tap into when the opportunity is there. These products provide readily available funds that broker clients can seamlessly access to quickly take advantage of opportunities.
Ticket Financing can also strongly enhance a broker’s strategic positioning in front of major events and year to year planning for inventory acquisition. Another large RCN client provided the following: “Working with RCN has been great. Their understanding of our industry and common sense approach to underwriting has gotten us approved for a line of credit seven times more than our business bank offered us.” A long term committed approach to the proper use of leverage can also substantially impact the performance of a ticket broker business over time. The same client offers the following: “Working with RCN has enabled us to grow our annual revenue by 500% since we started working with them. It is impossible to survive in today’s market without a financing partner that understands the industry. RCN is that partner.”
The previous article provided and referenced above asked “What Is Your True Interest Cost When Borrowing to Buy Inventory?” That article demonstrated that with a shorter term length and weekly payments (the 26 weekly payments standard for almost all Ticket Financing transactions), the total interest cost amounts to about 3.14% of the loan amount. Brokers that strategically align with RCN are using leverage to generate ROI that easily exceeds this total financing cost while also continuing to enhance their position in the marketplace while remaining financially nimble enough and prepared to jump on opportunities.
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 [email protected], or 860-533-4049.