RAA Group

NORTHFIELD, MINN. (December 3, 2009) — Broadband stimulus grant applicants can cut proposal prep time, dramatically reduce their risk to challenges and create more accurate statewide broadband maps to support a national broadband strategy using the first national broadband database. BroadBand Scout℠ from data and analytics company ID Insight reports broadband connectivity and usage down to the census block, also helping broadband service providers open new markets.

BroadBand Scout provides instant access to the data required to successfully apply for grant monies from the $7.2 billion American Recovery and Reinvestment Act of 2009 broadband stimulus program. This same data also allows broadband and wireless carriers to cost-effectively target new areas for service expansion and better research competitors.

BroadBand Scout was developed by a unique analytical survey process of accessing the millions of records in ID Insight’s proprietary databases that were initially assembled to track retail activity. By combining known Internet access information with address-related data, BroadBand Scout allows clients to see connectivity and usage at the most granular level. For more information, visit www.IDInsight.com/broadband.asp.

“Communities, carriers and states have been starving for this data,” said ID Insight president Adam Elliott. “Understanding current broadband usage by geography is an ongoing need for stimulus applicants as well as for the broadband and wireless carrier community. By creating easy access to extensive data and sophisticated analytics, we see a phenomenal opportunity for service providers and communities to develop a data-driven approach to planning so they gain access to grant monies that may have otherwise been impossible to get.”

One of the biggest frustrations of stimulus grant applicants is compiling the necessary broadband usage data as required by the federal agencies awarding the funds. They are further frustrated by the difficulty in defending proposals from challengers who claim incumbents already cover the areas where applicants plan to provide broadband. With BroadBand Scout, communities and companies are able to accurately identify broadband access and usage when requesting grants from the broadband stimulus program.

ID Insight is partnering with broadband industry expert Craig Settles, president of Successful.com, to deliver professional services that assist stimulus grant applicants prepare and defend their proposals, and help state broadband mapping teams effectively execute their projects. “The key to effective broadband strategy, both locally and nationally, is to capture accurate connectivity data directly from consumers and businesses,” said Settles. “ID Insight offers an excellent combination of expediency and accuracy that broadband project leaders need.”

In October 2009, the first grant application to receive funding was for statewide broadband mapping projects to support the FCC’s efforts to develop a national broadband strategy. BroadBand Scout enables states to launch their projects faster and execute with greater accuracy to meet the FCC’s requirements. Other stimulus funding awards should be announced in January 2010. There is one additional round of stimulus funding with all funds distributed by September 30, 2010.

ID Insight is currently licensing the data and information to companies, states and communities. The data is available in reports summarized at the state, county, tract, block group or block number levels. Using its patent-pending analytics system, ID Insight can also provide case-by-case consulting services to predict additional high-potential expansion markets. Besides grant applicants, these services are valuable to broadband carriers looking for insights, validation and competitive advantage for their plans to open new markets.

Broadband Webinar
Broadband industry expert Craig Settles and ID Insight president Adam Elliott are co-hosting a free Webinar to discuss the vital role accurate broadband usage data and coverage maps play in implementing an effective national broadband strategy on Wednesday, December 16, from 4:00 to 5:00 p.m. Eastern. To register, visit https://www2.gotomeeting.com/register/212771379.

About ID Insight
ID Insight, the innovator in Access-Point Intelligence, knows more about people and their access points — physical addresses, IP addresses, phone numbers and other points where fraud occurs — than any other identity-fraud risk-assessment company. Based in Northfield, Minn., the company combines its massive collection of data on people and access points with patent-pending analytics to help companies prevent fraud, reduce costs and capture more business. ID Insight provides next-generation market research, verification, authentication, and fraud solutions to financial services companies, credit issuers, retailers, online merchants and wireless providers nationwide. For more information, visit www.IDInsight.com.

About Successful.com
Successful.com has delivered community broadband services since 2006, though it provided services to technology companies and end-user organizations beginning with its inception in 1986. Previous needs assessment clients include the City of Glendale, Calif., the Little Tokyo area of Los Angeles and several cities in Santa Clara County, Calif. For over 20 years the firm’s workshops, consulting services and books have helped government and other organizations worldwide use technology to cut costs, improve business operations and increase revenue.

NORTHFIELD, MN  – A new set of nationwide broadband maps is now available from analytics firm ID Insight. According to the company, these maps enable broadband stimulus grant applicants to cut their proposal preparation time, reduce their vulnerability to challenges and create more accurate statewide broadband maps to support a national broadband strategy. BroadBand Scout from ID Insight reports broadband connectivity and usage down to the census block, also helping broadband service providers open new markets.

BroadBand Scout provides instant access to the data required to successfully apply for grant monies from the broadband stimulus program. This data also allows broadband and wireless carriers to cost-effectively target new areas for service expansion and better research competitors.

Spinoff From Retail Databases

BroadBand Scout was developed by an analytical survey accessing the millions of records in ID Insight’s proprietary databases that were initially assembled to track retail activity. By combining known Internet access information with address-related data, BroadBand Scout allows clients to see connectivity and usage at the most granular level.

“Communities, carriers and states have been starving for this data,” says ID Insight president Adam Elliott. “Understanding current broadband usage by geography is an ongoing need for stimulus applicants as well as for the broadband and wireless carrier community. By creating easy access to extensive data and sophisticated analytics, we see a phenomenal opportunity for service providers and communities to develop a data-driven approach to planning so they gain access to grant monies that may have otherwise been impossible to get.”

One of the biggest frustrations of stimulus grant applicants is compiling the necessary broadband usage data as required by the federal agencies awarding the funds. They are further frustrated by the difficulty in defending proposals from challengers who claim incumbents already cover the areas where applicants plan to provide broadband. With BroadBand Scout, communities and companies are able to accurately identify broadband access and usage when requesting grants from the broadband stimulus program.

ID Insight is partnering with broadband industry expert Craig Settles, president of Successful.com, to deliver professional services that assist stimulus grant applicants prepare and defend their proposals, and help state broadband mapping teams effectively execute their projects. “The key to effective broadband strategy, both locally and nationally, is to capture accurate connectivity data directly from consumers and businesses,” says Settles. “ID Insight offers an excellent combination of expediency and accuracy that broadband project leaders need.”

In October 2009, the first grant application to receive funding was for statewide broadband mapping projects to support the FCC’s efforts to develop a national broadband strategy. BroadBand Scout enables states to launch their projects faster and execute with greater accuracy to meet the FCC’s requirements. Other stimulus funding awards should be announced in January 2010. There is one additional round of stimulus funding with all funds distributed by September 30, 2010.

ID Insight is currently licensing the data and information to companies, states and communities. The data is available in reports summarized at the state, county, tract, block group or block number levels. Using its patent-pending analytics system, ID Insight can also provide case-by-case consulting services to predict additional high-potential expansion markets. Besides grant applicants, these services are valuable to broadband carriers looking for insights, validation and competitive advantage for their plans to open new markets.

Florida had six unemployed people for every online job advertised, according to The Conference Board.

In the South, November online advertised vacancies were up 6,100, reflecting increases in all of the most populous Southern states, except Virginia and Maryland.

Florida gained 10,300 and Texas was up 10,00, offsetting October declines. Online vacancies in Florida dropped in October by 8,300.

Nationwide, the report said online openings rose by 106,500 to 3.38 million in November.

“Since April, when labor demand bottomed, monthly gains can only be described as sluggish,” said Gad Levanon, senior economist at The Conference Board, in a news release. “We have yet to see a significant increase in employers’ demand for labor, and, until we see job openings pick up, it will be hard to bring down the unemployment rate.”

Florida ranks sixth in the nation when it comes to being entrepreneur-friendly, according to a new report by the Small Business & Entrepreneurship Council.

The council’s 14th annual Small Business Survival Index, released Tuesday, considers 36 costs to small businesses that are imposed by or reported by the government. Most factors are taxes, including personal income taxes, corporate income taxes, property taxes, unemployment taxes and health insurance taxes.

Also factored in are energy costs and crime rate.

The five most entrepreneur-friendly states are South Dakota, Nevada, Texas, Wyoming and Washington.

In the bottom five are Vermont, New York, California, New Jersey and the District of Columbia.

Click here for the full report.

Florida ranked 12th in the nation in the number of borrowers 60 days or more past due on their auto loans in the third quarter, according to a report by TransUnion.com.

The delinquency rate slipped to 0.99 percent from 1.1 percent in the same quarter last year. However, it rose slightly from the second quarter, when it was 0.92 percent.

Floridian’s average auto debt burden was $13,448, ranking 13th in the nation.

Nationwide, auto delinquency was highest in Mississippi, at 1.53 percent, and California, at 1.33 percent.

The lowest rates were in the District of Columbia (0.26 percent) and North and South Dakota (0.35 percent and 0.37 percent, respectively).

The nation’s average auto debt in the third quarter fell to $12,542 from $12,560 in the same year-ago quarter.

Nevada had the largest auto debt burden, at $14,721, followed by Texas, at $14,425.

“As in recent quarters, both the availability of funding in the market, consumer demand for auto financing and tighter lending standards have contributed to a significant decrease in the number of auto loans in the market, resulting in upward pressure on delinquency rates,” said Peter Turek, automotive vice president in TransUnion’s Financial Services Group, in a news release.

He added that TransUnion’s forecasting models indicate that the national 60-day auto delinquency rate will rise to almost 0.9 percent by year-end, a 7.5 percent increase over the prior year.

Three articles I want to point out to you that should get you thinking about the future of Wi-Fi:

(1) Andy Abramson’s long and thoughtful piece about sponsored Wi-Fi, sending party pays and the future of media in which he argues:

“Public Wireless” really takes hold, not from the telcos, or even the cable companies, but from the likes of Google, who understand how to monetize “free” better than anyone, and who also have the delivery billing system in place to bill back to a “sender” the same way they can bill back a click to an advertiser. Google, will then work with their “partners” in Clearwire, not to promote 4G WiMax as the pipe, but to use real WiMax in consort with companies like Comcast, Covad and TowerStream to deliver super fast Gigabit wireless to a series of access points around the country, where it then is distributed using WiFi. This is more than a likely scenario as Google has been a pioneer in Public Sponsored WiFi access for sometime, with their Mountain View WiFi network which has been up and running for a few years, surviving the failed Earthlink, MetroFi and other third party operator networks. By blending the “sponsored” public access model as Google has done with “sending party pays” the end user sees little or no cost.

(2) Network World’s eight ways 802.11n changes Wi-Fi

According to Network World, the approval of the 802.11n standard means improved security, higher data rates, better RF and interference management, use of Wi-Fi by devices never before associated with Wi-Fi, connecting to non-WiFi networks, personal area Wi-Fi (e.g. Wi-Fi Direct, which allows a Wi-Fi device such as the iPod Touch to connect directly to another Wi-Fi device such as a printer).

This is nothing new to those of you who have read Ken Biba’s articles on MuniWireless. If you have not read Ken’s articles, click on the links below:

The King is Dead, Long Live the King: 802.11n dramatically improves Wi-Fi outdoors

Real world measurements show muni Wi-Fi networks outperform WiMAX and cellular

(3) What Wi-Fi Direct means for Mac users: Glenn Fleishman has written a very informative article about how the Wi-Fi Alliance’s new Wi-Fi Direct standard greatly improves ad hoc Wi-Fi networking, that is, Wi-Fi connections between two devices (without the need of going through a base station).

via muniwireless.com

Ex-Factors

An upstart exchange offers a new option.

S.L. Mintz – CFO Magazine

April 1, 2009

While hoping to complete a second round of equity financing last fall, Data Drive Thru faced a cash squeeze. Needing capital to exploit rising demand for a patented high-speed data- transfer technology, CFO Brad Oldham had two viable options: increase debt or sell receivables. But a frozen credit market made traditional bank loans extremely difficult if not impossible for the company to access, and selling receivables to a traditional factor would surrender too much cash flow.

So the company turned instead to a new online exchange that does for receivables what eBay does for consumers’ used merchandise: auction it off. Live since December, The Receivables Exchange is an online bidding platform that touts greater control, faster remittances, wider access to global buyers, lower transaction costs, more transparency, and less documentation than other methods. It will accommodate amounts as low as $10,000.

Unlike eBay, however, buyers don’t end up taking physical possession of a product. Instead, they bid the amount they will pay for the receivables. The pricing is based on the risk of remittance. Gold-plated receivables, such as those issued by Wal-Mart, command the highest prices. Size of advance is also a factor — around 85 percent for good credits. The Receivables Exchange validates all parties.

The service’s primary appeal may be to small and midsize companies holding IOUs from big companies with sterling credit. Oldham is happy with his initial experience; his first auction, in December, found a buyer willing to extend him $100,000. The next morning, Oldham had cash in hand on terms he liked. Over the course of several transactions, he has trimmed the discount rate to less than 3 percent.

One buy-side portfolio manager calls exchange-traded receivables a brand new asset class. In sharp contrast with Wall Street’s fatal appetite for excessive leverage and complexity, says Bill Andersen of Andersen Capital Management, The Receivables Exchange exemplifies “the good side of financial innovation — bringing together buyers and sellers who would not have met otherwise.”

Quorum Technical Services, which provides IT staff to global corporations, uses The Receivables Exchange to augment its $200,000 line of credit. Founder and CEO Jack Karamanoukian says that Quorum tallies its invoices on Fridays and posts them to the exchange on Mondays. When totals exceed the $10,000 threshold, bidding can begin. The fastest trade so far: $19,000 in 28 minutes.

By SIMONA COVEL

Data Drive Thru Inc. was on a roll. The Dallas company had received $1.5 million in start-up money from an angel investor. Its signature product, a tool to transfer data from one computer to another, won an award at a trade show and landed on shelves at big-box stores like Staples.

But the company hit a financial wall in the second half of last year. A second round of angel funding, expected to come in at $7.5 million, fell through as credit markets froze. The company was too young to have the well-established cash flows needed to get a bank loan, and retail customers were taking longer and longer to pay—as many as 30 extra days in some cases.

The Journal Report

See the complete Small Business report.

“Everyone is holding onto cash as much as they can,” Chief Financial Officer Brad Oldham says.

So Mr. Oldham took an unconventional step: He listed the company’s accounts receivable—invoices due to be paid by the big-box stores that buy Data Drive Thru’s products—on a new online auction site called the Receivables Exchange. Anonymous lenders bid on those receivables, agreeing to lend Data Drive Thru money against them and then take a cut when customers pay the bills.

Borrowing against receivables isn’t new. For hundreds of years, cash-strapped companies have hired people or companies known as factors to advance them funds based on money owed by customers. But with interest rates sometimes exceeding 30% or 40% annually and tales of unsavory business practices, this small corner of finance is considered by many to be a funding source of last resort.

A few companies are trying to change that with products and services designed to make the process of borrowing against customer invoices cheaper and more transparent. These products are gaining ground in the recession as companies—particularly small, untested ones—find their credit lines cut and other sources of funding gone.

Mr. Oldham had worked with factors before and didn’t like the high prices. But he knew Data Drive Thru’s receivables were valuable; the company regularly collects hundreds of thousands of dollars from big, well-known office-supply stores. “Retailers may not be real fast paying, but they do pay,” he says.

That’s the ideal scenario for Receivables Exchange LLC, which launched its first online receivables auction in November. The New Orleans company—executives describe it as eBay for receivables—provides the platform for companies like Data Drive Thru to post their invoices. Lenders then peruse the site, searching for receivables against which they are willing to lend. Lenders bid on those invoices, with the majority electing a fixed buyout price similar to eBay’s “buy it now” feature.

The next day, the borrower is wired the money, minus the lender’s fee, which might be two, three or four cents on the dollar. Receivables Exchange, which is in the background verifying that the invoices are real, takes a varying percentage commission on each trade.

While the credit crunch has buoyed Receivables Exchange’s growth on the borrowing side—the company has 200 customers and says its sweet spot is a firm with $10 million to $100 million in revenue—it also has translated into fewer lenders. Exchange co-founder Justin Brownhill says he expected to see 20 times as much demand as supply on the exchange. Instead, with $7.5 billion in invoices and $15 billion in available capital, it’s about a two-to-one ratio, largely because banks haven’t stepped up as much as expected amid their own vast problems.

Hedge funds have made up for some of the lag. As many as 40% of the lenders on the exchange are hedge funds looking for solid returns as other types of investments sag. Banks, asset-based lenders and factoring companies each comprise about 20% of the lending base.

Borrowers don’t know who’s providing the loan. Mr. Oldham, for one, says he doesn’t much care. In the past few months, he has posted hundreds of thousands of dollars in invoices—usually at least one auction per week—in exchange for a cash advance. Participating in repeated auctions with a solid payment history has bolstered his company’s reputation on the site, which in turn has lowered his cost of capital to less than 3% every 30 days, down from 4% in the beginning.

“Every auction I’ve had, it closes one day and the money is wired to my account” the next day, Mr. Oldham says. “It doesn’t matter to me who it is.”

Keeping It Real

While the generally steady cash flow from receivables appeals to bank lenders, many say they just don’t have the infrastructure or manpower to monitor each borrower’s customers to make sure their invoices are up to snuff. That’s where FTrans Corp. comes in. The Atlanta technology company offers a sort of virtual clearinghouse for companies, their bankers and their suppliers. A company posts its receivables on FTrans’s online system, and FTrans verifies that the invoices are real, giving banks enough information to lend against them.

“Typically a community bank does not have a department set aside to do that,” says David Dunbar, the chairman and chief executive at Synovus Bank in St. Petersburg, Fla., a member of Synovus Financial Corp.’s regional-bank system.

For a bank customer to qualify for a receivables-based credit line, it generally would need to offer full, audited financial statements, which most small businesses don’t have. Indeed, when FTrans first presented the system to Synovus bankers about two years ago, a few executives voiced concerns about whether FTrans would be able to sufficiently monitor invoices to make sure they were real, says Mr. Dunbar. So far, he says, there have been no major problems.

The bank, in an attempt to branch out from real-estate lending, is now aggressively pitching FTrans-facilitated receivables lending to new and existing clients, many of whom wouldn’t qualify for other types of commercial loans, Mr. Dunbar says.

Today, a year and a half since Synovus first implemented the FTrans system, more than three dozen clients from the bank’s three commercial offices are using it. The bank has a right to choose how much of each invoice it is willing to advance—maybe 90% for a well-known retailer but only 70% for a lesser-known company that seems like a greater risk. Borrowers typically pay between 1% and 3% on each transaction, Mr. Dunbar says. The bank and FTrans each take a chunk of that.

FTrans also administers a handful of loans on its own. That’s the case for Billy Teagle, president of Atlanta-based retail-merchandising company Rocket Retail Merchandising LLC. In October, Mr. Teagle went to his bank to ask for a $300,000 line of credit to fund a geographic expansion.

“They wouldn’t give me the time of day, despite having four years of profits,” Mr. Teagle recalls.

Mr. Teagle called FTrans, and they set up a line of credit, secured by receivables, with a $300,000 limit. He estimates that he’s financing as much as $75,000 each week through FTrans, inputting invoices into the FTrans system when he bills clients and borrowing against them until his customers pay. Mr. Teagle says he had a problem when a client paid a $25,000 bill 30 days late and he was forced to pay the interest on the loan for the extra time. If multiple customers did that at the same time, it would be a problem. So far, though, that has happened only once.

Getting Big-Company Rates

With buyers anxious to extend payment terms in tough times, some are turning to Atlanta’s PrimeRevenue Inc., a supply-chain finance company. PrimeRevenue works with large companies—from car makers to retailers—that want a few extra days to pay their hundreds of small suppliers. Through a network of bank partners, PrimeRevenue will advance the money owed to the small suppliers, at an interest rate that’s based on the credit standing of the bigger buyer company—generally a single-digit annual rate, PrimeRevenue says. PrimeRevenue’s fee is wrapped into that rate; the rest of it goes to the banks that provide the financing. Suppliers can log into the program, look at their future-dated receivables and either elect to wait for the buyer to pay the bill, or click a button to get an advance.

Small suppliers can’t just ask to be in the program, however. The bigger buyer company has to initiate the system and pay a fee to participate. Today, PrimeRevenue services 40 big global companies or units of those companies, up from about 30 early last year.

For small suppliers, the program offers an opportunity to land financing at rates based on the credit quality of their big customers, instead of the higher rates generally offered to smaller companies. When a big industrial customer told executives at metal-stamping company Universal Metal Products about PrimeRevenue, “our initial reaction was skeptical, because whenever you hear of this type of thing you think of some kind of back-room factoring house,” says John Rapacki, the Wickliffe, Ohio, company’s controller. But the rate was much lower than a factor, and Mr. Rapacki liked the ability to use the system without a fixed commitment. (Universal Metal Products’ large customer doesn’t want to be named; some participating companies would rather not admit they are extending payment terms.)

The ability to pick and choose when to use the system for financing has proved critical in recent months as rates have marched higher amid uncertainty in capital markets, Mr. Rapacki says. At the beginning of 2008, the interest rate on his receivables was around 3%, and Universal Metal Products would regularly take advances on payment. These days, it is closer to 10%, so the company rarely taps into the financing.

–Ms. Covel is a staff reporter of The Wall Street Journal in Chicago. She can be reached at simona.covel@wsj.com.