Here’s a rundown on the kinds of fees your can expect to pay when you borrow money to finance a billboard.
Loan Fee – This is typically 1-2% of the loan amount. It is paid at closing to compensate a lender for the time spent to underwrite a loan. Banks may charge 0.25% to 1.0%. I have seen some private lenders charge as much as 5%.
Legal or Transaction Fees – I charge 1-2% of the loan amount to cover my legal costs associated with drafting a loan agreement and perfecting my security interest in collateral. Legal and transaction costs include attorney fees, ucc and mortgage filing fees, title insurance for real estate, lien searches and travel expenses to inspect boards. I ask for the transaction fee when my commitment is accepted in order to know that I will have my legal and out of pocket costs reimbursed if a transaction never closes.
Appraisal Fees – The SBA and many banks will require you to pay for a third party appraisal of your assets in order to provide independent confirmation of the value of your collateral. I have seen appraisals cost anywhere from $1,000 to $50,000.
