How to Finance a Data Center

How to Finance a Data Center

Why Do Data Centers Need Funding?

There are a variety of reasons why an owner of a data center would need access to capital. To begin with, the technology of storing and sharing data is constantly improving and data centers require periodic upgrades; this dynamic is best illustrated by the exponential changes that occurred within the personal computer space. Only ;ma few years ago, consumers were thrilled to have a PC with 8 GB of RAM. Today, 8GB of RAM is fairly commonplace, and at some point in the near future, 8GB will be considered antiquated.

As the technology of data storing, networking, and security improves, data centers will need to be equipped with the latest upgrades to support the needs of its users; these upgrades can be expensive and can require a lot of manpower to replace, setup and maintain.

Financing Challenges for Data Centers

Since the landscape of data storage and the demand for these services is constantly changing, owners of data centers are continually challenged to obtain funding.

Leasing only accounts for a portion of the new equipment costs, meaning additional capital is required for any upgrades.

Another challenge facing owners of data centers is managing the ebb and flow of the demand for their services. The success or failure of both established companies and startups can greatly impact the fortunes of a data center; this risk can make potential funding sources uneasy about underwriting a loan.

Data Center Conventional Loans

From conventional loans to short-term bridge loans, data centers have access to the full slate of financing options. However, not all of the financing options make sense for data centers and, in the case of conventional loans, can take months to finalize.

If a data center loses a few clients, or equipment upgrades are not going as planned, the need for immediate capital becomes paramount. Between the long paperwork process and even longer closing process, a data center can reach financial ruin before they can secure the funding they need.

Additionally, when a data center is struggling, a long financing timeline is not an option, especially if it may ultimately fall through.

Private Loans for Data Centers

As an industry-leading private lender, we understand the value of data centers and their unique business challenges. We are private lenders with flexibility. iBorrow is dedicated to providing short-term loans for data centers that need capital fast, and our streamlined process can get your loan approved in approximately two weeks.

We are not your typical bridge loan lender. Rather than rely on leverage lines of credit, our deep pools of capital allow us to provide flexible loan terms without any personal guarantees.