Billboard loan and lease repayment terms vary from 3 to 20 years.
3-7 years is normal for lease financing and digital sign financing. The most advantageous leasing tax treatment occurs only if a lease has a term of less than 75% of an asset’s life. That means a lease of no more than 7.5 years if a digital sign has a life of 10 years. Many leasing companies want 5 year repayment because of a fear of technological obsolescence.
5-7 year amortization is the norm for bank financing. Bank balance sheets have short term liabilities (e.g. CD’s and commercial paper) so banks don’t like to go beyond 7 years unless they can make securitize a loan (e.g. home mortgages).
10-15 year amortization is the norm for insurance company loans. Insurance companies have stable long term premiums to invest so they make longer term loans.
10-20 year amortization is possible with private lenders as long as the weighted remaining life of a Borrower’s land leases is in excess of the amortization rate.
Regardless of the amortization, many lenders have a balloon maturity at the end of five years in order to be able to reset pricing and other terms if debt markets tighten or the economy sours.