The Wall Street Journal reports that the federal reserve is cracking down on risky loans which have the following characteristics: Lax repayment schedules. An absence of loan covenants. Debt/Cashflow (earnings before interest, depreciation and amortization) in excess of 6:1. A crackdown may mean the regulators put the heat on Clear […]
Billboard Lending
If you think the big banks don’t want to lend to you it’s because they don’t.
The Wall Street Journal writes this morning that the biggest banks in the US are making far fewer loans to small businesses than they did a decade ago. The Journal reports that the 10 largest US banks held $44 billion in small business loans (loans less than $1 million) in […]
What’s a safe level of debt for an outdoor company?
Lenders will advance up to 6.0 times cashflow (earnings before interest depreciation and amortization) to outdoor advertising companies. I think a safe level of debt for most outdoor companies is about 2.0 times gross revenue or 4.0 times cash-flow. This level is safe because it gives your company the financial […]
Billboard Loan and Lease Repayment Terms
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 […]
Which is better? A billboard loan or a billboard lease?
Is is better to finance your billboard or digital sign with a bank loan or with a financing lease? It depends on your objectives. A billboard loan is better if: You want long term financing (10 years or more). Billboard loans have terms of 10-15 years versus a 5-7 year […]
How much does billboard financing cost?
What does it cost for finance your billboard company? Equity providers want to a return of 15-25% per annum with an ability to realize the return over a five year period. Lamar’s public dividend REIT is trading at a 6.33% dividend yield. Outfront Media’s REIT is trading at a 5.52% […]
Billboard Loans creates a better billboard financing lease.
Lots of companies want to fund your billboard or digital sign by providing lease financing. The benefits of leasing include 100% financing and sometimes a lack of a personal guarantee. Billboard financing leases often have three big drawbacks: (1) You don’t know how much the lease costs. I once had […]
Prepayment Penalties Can Kill You If You Use Billboard Lease Financing.
There are several finance companies which make billboard equipment leases. They are anxious to tell you that leasing will save your capital by allowing you to finance 100% of the cost of the sign. None of them talk about prepayment penalties. Lease prepayment penalties can kill you. It’s normal for […]
Why personal guarantees are so important to billboard lenders
A personal guarantee is a requirement for almost every loan I do. 20 of our 22 existing loans require personal guarantees. The only two borrowers who don’t guarantee are non-profit companies where no single person is in charge. I’ve also sometimes made loans without a personal guarantee when a borrower […]
Interest Rates Aren’t Everything In Billboard Loan Financing
I often I pick up the phone and have a conversation goes something like this. “Hi, I want a billboard loan. What’s your rate?” The borrowing rate is an important part but it isn’t the only thing that matters. I’ve had customers chase rate and then get in a liquidity […]
