Jim Johnsen of Johnsen Fretty interviewed Dave Westburg of Billboard Loans about billboard lending. We’ve reproduced the interview below. Dave, you’ve done a terrific job building Billboard Insider into a great source of information. I enjoy reading it first thing each morning. I feel very honored to sit in your seat […]
Billboard Lending
Avoid the Equipment Leasing Death Penalty
Almost all equipment leasing companies except Billboard Loans have prepayment penalties. Sometimes the prepayment penalties are called yield maintenance clauses. Sometimes the prepayment penalty is a fixed % of the lease amount (5% in year 1, 4% in year 2, 3% in year 3…). The death penalty prepayment clause says […]
8 Items Your Outdoor Lender Wants
I take at least a phone call a week from a small outdoor company looking for financing. Sometimes the process drags on because the outdoor company doesn’t have the information Insider needs to evaluate the loan request. Here’s the information you should put together before you approach a lender. By […]
Limit Outdoor Debt to 3X Gross Revenue
3 times annualized revenues is a reasonable debt limit for most small billboard companies. Here’s why. If you borrow less than 3 times gross revenue, your plant will be worth more than debt even if revenues drop and multiples contract during a recession. Industry revenues declined 20% during the 2008-2009 […]
Federal Reseve cracks down on risky loans.
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 […]
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% […]
