On a billion dollar loan, that's 10-20 million a year (because it's on the high side of the deals Jerome describes, call it 10 million). Over the life of that loan, it is a nice, stable (barring acts of god and if everyone does their work well) income for any organization. Internally, the bank employs and pays maybe 2 dozen people to service this loan...not bad. And while this loan matures, other deals are being spun, other deals near the end of their terms.
I have been an early hire in 5 startups. The most any of these manufacturing firms ever grossed was 6 million. (For some reason, the membrane keyboard business - 3 of those starups - loses profitability and management has a much tougher time keeping things running smoothly with anything more than about 6 million in gross sales per year.) Employing anywhere from 20 to 90 people, I rather like Jerome's banking business model more than my manufacturing one.
1% of a billion dollar deal. Ok, sign me up. "It Can't Be Just About Us"--Frank Schnittger, ETian Extraordinaire
