Ltt Sme Ltd

Investment Requests for Successful British Datacentre Expanding to Los Angeles and Amsterdam

Overview
Funds raised
£150,000
Final AER
16.95%
Loan Term
60
Completed:
10/02/2014
About the Business
Company Name: LTT SME LTD Company Number: 06937713
Business Type: Technology Years Trading: 4-5 years
Business Location: LONDON
About the Risk
Risk Rating: B

Default rate

7.1%

Bad debt rate

5.84%

About the Security
Security Offered:
content
All Assets Debenture
Est. Equity: £0.00

Who are we?

Our company provides bespoke datacentre and cloud services to SMEs across Europe. We generally provide a full turnkey service to our customers taking their concepts and turning them into reality irrespective whether solution requires programming, engineering or datacentre services. We focus on specific niches where we can draw on our twenty years of real world experience for the benefit of our customer.

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Details

Who are we?

Our company provides bespoke datacentre and cloud services to SMEs across Europe. We generally provide a full turnkey service to our customers taking their concepts and turning them into reality irrespective whether solution requires programming, engineering or datacentre services. We focus on specific niches where we can draw on our twenty years of real world experience for the benefit of our customer.

READ MORE...

In 2013, we requested £100,000 from RBS members and the loan was funded a week or so later. Thanks to the support from RBS and its members, we completed our US acquisition on time and in budget. The result of this acquisition has substantially increased both our asset base and profit. We have successfully kept all of the customers from acquisition with a 0% churn, this in part is due to our relentless sales engineer’s effort in the US and that the services offered have the right mix of features and priced at the right level for the market. The former owner of this US business approached me in December with a view to acquire their Dutch business in Amsterdam as they have decided to exit the managed services sector and focus on systems development. We are ideally positioned to acquire this business as some of their customers in Amsterdam also used buy services from them in the US (now transferred to us). I have completed an inspection of the asset base in Amsterdam and its literally a replica of the setup we purchased in the US and similar customer demographics. We have put an almost identical offer on the table to them and they are ready to proceed. Timing as with everything is critical, they initially wanted to get the business sold by year end 2013, but we have delayed making a loan request until our accountant had completed the interim accounts so that you could see our growth in terms in figures rather than words. We have a gentleman’s agreement not to offer the assets publically until month end. We will hire one of their datacentre staff to continue to operate and maintain the infrastructure and ensure continuity. This will complete our European footprint for now. We are seeing surging demand from Asia (China, Hong Kong and Japan) who at the tail end of last month accounted for over 50% of new orders. These customers are asking for us to build a datacentre on the West coast USA in Los Angeles to improve connectivity into Asia. We are uniquely positioned to do this due to our relationships with China Unicom and China Netcom, the two main telephone/data networks in mainland China. Now that we have a US base, its very easy for us to roll out this second location, when I was in the US a week ago, we entered into a non-binding agreement to lease space at building in Los Angeles. I took a contractor with me who I have used for many similar projects. Both of us came to the same findings that it will be quick and cost-effective to retrofit the space. We have a project plan ready, we have soft-ordered the equipment – servers, racks, UPS’s, generator, etc; we can start construction within seven days of lease execution. In summary – we borrowed £100,000 in September 2013 to make this acquisition - its acquired, making profit and growth rate is a double-digit percentage. The value of our asset base has tripled (based on market value not highfalutin over valuation) and our number of customers has increased many hundred times over. We’ve completed and surpassed every objective we set with this project. This next phase will establish a mainland EU datacentre in Amsterdam and a West coast datacentre in Los Angeles. Amsterdam will be an almost turnkey operation, we expect 2-3 weeks to make the changes we need, then it will be generating profit. Los Angeles will take approximately 2 months to complete and will be generating revenue by end of March 2014. We are comfortable with these timelines and from our experience they are accurate and feasible. If you have questions please don't hesitate to ask.
Loan Offers
Business Profile

What is the loan for?

In 2013, we requested £100,000 from RBS members and the loan was funded a week or so later. Thanks to the support from RBS and its members, we completed our US acquisition on time and in budget. The result of this acquisition has substantially increased both our asset base and profit. We have successfully kept all of the customers from acquisition with a 0% churn, this in part is due to our relentless sales engineer’s effort in the US and that the services offered have the right mix of features and priced at the right level for the market. The former owner of this US business approached me in December with a view to acquire their Dutch business in Amsterdam as they have decided to exit the managed services sector and focus on systems development. We are ideally positioned to acquire this business as some of their customers in Amsterdam also used buy services from them in the US (now transferred to us). I have completed an inspection of the asset base in Amsterdam and its literally a replica of the setup we purchased in the US and similar customer demographics. We have put an almost identical offer on the table to them and they are ready to proceed. Timing as with everything is critical, they initially wanted to get the business sold by year end 2013, but we have delayed making a loan request until our accountant had completed the interim accounts so that you could see our growth in terms in figures rather than words. We have a gentleman’s agreement not to offer the assets publically until month end. We will hire one of their datacentre staff to continue to operate and maintain the infrastructure and ensure continuity. This will complete our European footprint for now. We are seeing surging demand from Asia (China, Hong Kong and Japan) who at the tail end of last month accounted for over 50% of new orders. These customers are asking for us to build a datacentre on the West coast USA in Los Angeles to improve connectivity into Asia. We are uniquely positioned to do this due to our relationships with China Unicom and China Netcom, the two main telephone/data networks in mainland China. Now that we have a US base, its very easy for us to roll out this second location, when I was in the US a week ago, we entered into a non-binding agreement to lease space at building in Los Angeles. I took a contractor with me who I have used for many similar projects. Both of us came to the same findings that it will be quick and cost-effective to retrofit the space. We have a project plan ready, we have soft-ordered the equipment – servers, racks, UPS’s, generator, etc; we can start construction within seven days of lease execution. In summary – we borrowed £100,000 in September 2013 to make this acquisition - its acquired, making profit and growth rate is a double-digit percentage. The value of our asset base has tripled (based on market value not highfalutin over valuation) and our number of customers has increased many hundred times over. We’ve completed and surpassed every objective we set with this project. This next phase will establish a mainland EU datacentre in Amsterdam and a West coast datacentre in Los Angeles. Amsterdam will be an almost turnkey operation, we expect 2-3 weeks to make the changes we need, then it will be generating profit. Los Angeles will take approximately 2 months to complete and will be generating revenue by end of March 2014. We are comfortable with these timelines and from our experience they are accurate and feasible. If you have questions please don't hesitate to ask.

Why consider investing?

Historically our business has been built without loans or debts - we expanded organically and through self funding. In September last year, we borrowed £100,000 from Rebuilding Society members to complete an acquisition, which was completed on time, in budget and without any hiccups. Through this acquisition our fixed asset base as increased nearly three times from £124k to £336k, we have based the asset valuation on real market prices (eBay) rather than taking the full retail price and depreciating a few percent. Our asset value is very conservative and far exceeds the amount already borrowed and this additional £100k, leaving a surplus of circa £136k. Our turnover for the past six months has increased almost three times over the proceeding six months. Profit for the past six months is almost twice that of the whole of fiscal year 2012-2013. Our business is growing as we planned and in a controlled and managed fashion. In my last application, I said we would expect to bring the US operation to profit in 6-9 months, it is already in profit after three months. The goals that’s we stated on our last loan application here on RBS, we have met or exceeded. I personally have 10+ years experience in the US market, and back at the dawn of the commercial Internet (1993) I built a pan-European network spanning 14 cities to deliver local Internet access. This expansion into Los Angeles and acquisition in Amsterdam is well within my experience and expertise. My building contractor for Los Angeles has worked with me for nearly ten years and we have completed a number of projects together; and my sales engineer in US has shown his mettle over the past few months by delivering results consistently. In terms of asset security in US and EU – RBS is holding a debenture over the company. Recovering assets in the US is an extremely simple process. Given that the business is profitable, it could be sold by a broker as a going-concern and would generate considerably more than the raw asset value. These types of businesses are very easy to sell. Asset recovery in Europe/UK is just as easy – as the European courts will also accept bankruptcy proceedings from one member state to apply to assets in another member state via an European Enforcement Order (EC Reg 805/2004). So in the event of default, a winding up petition in the UK would be valid for recourse against the UK, Dutch and US assets. We have an immediate requirement today to deliver services in Los Angeles, that business has customers who would fill racks of servers as soon as we announce it. The Amsterdam business is very similar, the demand for servers on mainland Europe is extremely high. We expect both businesses would be profitable within 3-6 months from acquisition/go live. ** The original loan held by LTT SME will be refinanced through this loan**
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