Any Vet's out there want to share a clue? :)
I have $338M in Aircraft and $132M in Loans at the moment. Even with multiple $40M AC available for collateral, the only loan I can get is ~$8M. It seemed like early in the scenario I could get loans even when I was near $0 Company Value. Is there a variable I'm not getting?
Earlier in the scenario, a couple diff times I had a new plane show up while I was sleeping that put me in the Red. But as soon as I logged in, I grabbed a Loan and got back in the Black. Did I possibly completely ruin my 'credit rating' when that happened?
What is your credit rating? Not quite sure why that is, surely, with such a company value, you should be able to get more.
Currently it is a B Credit rating.....but I've now missed a few loan repayments since it stopped letting me take a loan out on new planes. Seemed awfully unreal that I couldn't put up a $40M Aircraft for a $15M'ish loan when the first one of this batch arrived. Since it had been no prob at all until that point. I was making sure my Company Value was positive and I had great net income vs my current loan costs.
Now I can't put up $120M worth of collateral for any loan amount at any Interest Rate ($40M is all I need). Even with a positive cash flow and $200M Company Value.
Have to admit this totally caught me flatfooted and looks like it will cost me the company now.....gnnn.
I just want someone to make it make sense so I take it as a lesson learned and not just 'got screwed by a hidden rule/formula'.
There is a cap the the amount of loans that you can get, regardless of whether they're Secured or not.
But that's usually something in the range of about $450M.
And you say the total of ALL loans you have is just $132M?
Or do you have $338M in Loans secured with AC and another $132M in Unsecured Loans? That's not what you said in your first post, I just ask because those two togethr -- $338M + $132M is almost exactly what the loan cap normally is.
Well (I have AAA rating), just checked I could get a 410 million loan out, but I have almost 200 million+ out standing still (less than half of which is secured). Though the bank states in their 'take out a loan' section that they are only willing to give me a 221 million loan with full securities. So I guess it might be a cap related to the credit rating potentially. Can't see other uses for it, as the interest and credit rate seem to be equal to all.
Damn.....that makes sense. Kinda wish there was some chart or something to let you know what ratio of Company Value you needed for each Credit Rating then. Sucks that I have have $120M in Brand Spanking New Aircraft just sitting in the hanger, a great positive cash flow and good Company Value - and I'm going to go bankrupt. Not quite the simulation I expected, lol.
I had mapped out my Income, added a hefty margin of error (for potential competition on routes) and knew I would make loads of cash with these new planes and pay the loans off in no time. But that was counting on the Loans for approx 1/2 their cost as each was delivered. Since I had been doing that with my Airline in the Jet Age for a long time, I figured it was fine in Euro 2 also.
Quote from: Sigma on March 21, 2010, 02:30:14 AM
There is a cap the the amount of loans that you can get, regardless of whether they're Secured or not.
But that's usually something in the range of about $450M.
And you say the total of ALL loans you have is just $132M?
Or do you have $338M in Loans secured with AC and another $132M in Unsecured Loans? That's not what you said in your first post, I just ask because those two togethr -- $338M + $132M is almost exactly what the loan cap normally is.
value
Money -32 283 431 USD
Value of aircraft 336 511 428 USD
Loans -132 142 501 USD
Current company value 172 085 496 USD
lol - Finally managed to sell one of the planes. Went from -$35M and no Loan available despite $120M in potential collateral to $5M in the positive (and less available collateral) allowing me to borrow $79M. No change in my actual Credit Rating and my Company Value dropped as a result of selling the plane for a bit of a loss. So both those variables are apparently a non-factor.
I'm a bit flummoxed as to why negative Cash On Hand is such a HUGE deciding factor to obtain a Loan.....since Loans historically, in the Real World, are often used specifically to remedy that exact situation.
In my opinion, one can get far too little loan in this game.
It's probably (my guess) done to balance the game by limitting the speed of growth of airlines.
It tends to lead unsatisfactory results as descripted in this thread.
Remember that if you take a loan and you do not fully secure it with assets, the availability of money will be seriously slashed... So, if you take out a loan of 100mln USD securing it with 80mln of a/c and 20 mln of not secured loan, your availability of non secured loan will be lower...
Quote from: EYguy on March 21, 2010, 12:53:51 PM
Remember that if you take a loan and you do not fully secure it with assets, the availability of money will be seriously slashed... So, if you take out a loan of 100mln USD securing it with 80mln of a/c and 20 mln of not secured loan, your availability of non secured loan will be lower...
I completely understand that logic. However my situation was with $120M worth of AC available for collateral, so we aren't talking about unsecured loans.
Quote from: Powi on March 21, 2010, 08:34:00 AM
In my opinion, one can get far too little loan in this game.
It's probably (my guess) done to balance the game by limitting the speed of growth of airlines.
It tends to lead unsatisfactory results as descripted in this thread.
I would have absolutely no problem with that. Whatever tweaks are necessary by the Game Dev's to create play balance is perfectly acceptable.
It's the part where I haven't a clue as to why I was suddenly stopped from taking loans that confuses me. It seems to be an invisible line that is not explained at all. How is one to plan AC purchases that don't arrive for months/years when the Loans can be suddenly stopped for no discernible reason? I was maintaining a consistent (actually growing, I thought) ratio of Assets vs. Loans taken, a great positive cash flow and was well under the (previously unknown to me - another invisible rule?) hard cap of $450M.
As stated, I'm back in the Black now with a emergency sale of a New AC at below value. But I'd really like to know what happened in the first place to avoid it in the future. At the moment, it feels like the Sim rolled a pair of dice for me and it came up Snake Eyes, so "NO Loans for You Sucka!!" lol
If your business plan fully bets upon having an unlimited supply of credit and you're not able to support your spending through cashflow, its probably a business plan worth changing...
Sure, debt can be used to rapidly expand your airlines and create the cashflow that you desire, but overall, the return you can make on debt in this game is stupidly high compared to reality.
Overall, if you can't cashflow the purchase of a big order of planes, then lease a few and buy a few, unless you'd prefer the purchase to bankrupt you...
heh - 'If your business plan fully bets upon having an unlimited supply of credit' - I never asked for unlimited credit, and by examples previously posted in this thread I was no where near that invisible hard cap either. (Thank you to those guys for sharing undocumented info btw) - I was asking for input as to why I suddenly couldn't get a loan in my specific situation. I want to learn. If it had been a matter of hitting a surprise hard cap, I could have accepted that as a gameplay tweak by the Dev's, made a note of it and started over if I felt the game was worth playing despite hidden rules.
It appears you are saying that one needs to have the Cash to cover an AC's arrival, and then take the Loan out on it to cover the arrival of the next AC. That just seems so backasswards to Logic. The whole point of Loans in Real Life is to fund temporary Cash Shortages or Capital Investments. The Bank will give me a $40M Loan using a $40M AC as collateral, unless I am -$1M (-$5M, -10M ?) Cash on Hand, and then suddenly the collateral is worthless? Cash on Hand is a limiting factor to Loan availability? Really?
But if that is your point.....I guess what I am asking is at what point do I need to plan for that? I had been growing just fine and making great gains using the 'Take a Loan after delivery' until I hit the invisible wall of a certain unknown negative Cash on Hand apparently. Is this a known value, or random? Am I expected to fail until I figure it out on my own, or is it knowledge to be shared and I simply haven't phrased the question correctly?
"unless you'd prefer the purchase to bankrupt you..." LOL - initially I took that as patronizing. But whatever, makes me laugh now that the whole Loan thing makes even less sense to me then it did my first day playing.
Would it be possible to get verification from Game Dev that Cash on Hand seems to be a limiting factor in the availability of Loans?
Also it appears that the exact time of the week/day matters a heck of a lot also. I had $9M avail for loans so I went to check out which plane that I was currently leasing that I wanted to purchase. Apparently I should have just grabbed the Loan immed and then decided what I wanted to buy. The day flipped from Sunday to Monday and suddenly I can only get $225k in loans. (Different Game then the previous examples) Shouldn't Loan availability be based on long term data not daily figures? My weekly profit (per the dashboard) was up 30% from the previous week, so that appears to be a non-factor. Some expenses that don't hit the income statement until midnight Sunday were enough to lower my Credit availability by over $8M?
Again, if it is that way for playability, no prob. Is it specifically designed to keep us logged in and refreshing to get the best deal? Or is it just a Vet trick to know that Sunday is the best day for max loan amounts? Gotta wait another 3 hours to test that theory, hehe. Just hoping for some insight on how it works so I can divest myself of the 'real world' assumptions that I am saddled with :)
There's a few things to consider with your available credit that will impact what a bank will be willing to lend you. The key variables are day of week and cash on hand. Credit rating only seems to help your rate...
With regards to day of week, keep in mind that this is game is designed to be played and measured on a WEEKLY basis rather than a daily basis, in an effort not to become too detail oriented. Thats why you see things like staff salaries getting charged once weekly on late Tuesday morning, marketing being charged on the day of the week that it is due each week, and other revenues/expenses that aren't driven on a daily basis.
Since the bank knows that you will have your largest cash outlay in a week on Tuesday, a determination of the cash you have on hand on Monday will tell them its about to drop by a potentially significant amount with relation to that week's profit and loss. However, on a Sunday, there are no more forecasted large expenses to the bank would be more willing to lend to you during that week. The cycle starts over the next week.
Cliff notes:
You want to borrow from the bank on a Monday
You have $1M cash on hand
You will spend $4M on staff salary the next day
The bank knows you're about to pay out a bunch, and sees that as a risk of getting a return on capital.
Bank reduces risk exposure through lack of generosity.
Totally apprec that info Schro. Pretty much matches up with what I was finding with my spreadsheet. I'm still baffled as to why Cash on Hand is a factor at all and why it uses a very short term snapshot of the Company's Income Statement and Expenses coming due when the game has it already broken down in monthly/quarterly statements.
But, as Sami pointed out in the other thread. That's how it is in Airway Sim World - deal with it.....shrug ;)
I'll start keeping a reserve of Cash on hand so I can borrow. hehe - just feels wrong even typing that.
Quote from: Aahz the Pervect on March 23, 2010, 11:42:58 PM
I'll start keeping a reserve of Cash on hand so I can borrow. hehe - just feels wrong even typing that.
Thats how lending works in the real world. Banks/financial institutions are only (or most) willing to lend to those who don't need it...
Just to clarify - that was just a humorous quip, yeah?
Company A = $50M Cash on Hand, $300M in Assets and $300M in current Loans.
Company B = -5M Cash on hand, $300M in Assets and $100M in current Loans.
Both have equal current and estimated future profit margins.
My experience with the lending industry tells me that Company B will be far more likely to get a Loan even tho they 'need' it more.
Yes, its a humorous quip...
Sadly, the scenario you describe doesn't really happen often - I probably wouldn't loan money to either of them, as the first is fully leveraged and the second mysteriously is in the hole banking wise but is supposedly profitable? That'd point to poor cash management to me...
It also depends if your profitabiliy is based on net profit, EBIT or EBITDA ;D
If the net profit numbers are the same, company A is stronger because it has cash and is generating more income to service a higher level of debt... However, if you're looking at EBIT earnings, B might be stronger...
Statement of cashflows and projected cashflows are pretty important in determining the viability of loans - you can recognize revenue all day long, but if you're not able to collect it before you're bankrupt, it doesn't do you much good....
Yup - Completely agree with you there. The trap that got me was the backwards financing of new AC here. Had an AC due for delivery and the Loan capacity to easily finance it once it arrived, since I couldn't finance it before I actually paid the Cash on Delivery. But, when it arrived it dropped me from $15M in the black to -5M into the Red and bammo, bank shut it's doors abruptly, despite the fact that my Company value actually went up ~$10M and my profits should be expected to increase with the new plane replacing an older, leased AC.
Live and Learn.....haven't really played the game until you've bankrupted spectacularly at least once, lol.