Digital Billboard Financing: Tips for Meeting With the Lender
So you have your lease and permits for that A+ digital location and you are ready to build that money making sign. There’s only one problem - getting the money to do it. Banks aren’t as liberal in their lending practices as they were in the last decade. They may put you through the ringer before they make their funding decision.
Funding requests for digital billboards are not something that the average bank lender handles regularly. They may not necessarily understand the business and could be fearful about what they would do with a billboard in the event of foreclosure. Here are a few quick tips that may help them familiarize your lender with your business model. With the right information, you can help make the loan process easier.
Have a Solid Package: Have all your financials, permits, leases, construction quotes and necessary documents in one neat package. Additionally, provide a single page brief giving an outline of how digital billboards are sold and operated. Any marketing materials you have may be a big plus as well.
Create a Cash Flow Statement: Provide them with a spreadsheet that outlines your construction costs, sales projections, ROI, debt coverage and cash flow valuation. With this spreadsheet, you and your banker can change sales numbers to view different sales scenarios.
Provide an Operator List: When banks repossess real estate, they know how to market and liquidate those assets to recoup their money. Billboards are a different story.
One thing I have done in the past that I feel has greatly helped bankers feel more comfortable with lending for a billboard has been to give them the contact information of as many nearby operators as possible. My presentation is designed to convey that this digital billboard project will be a success (because of the location, my ability, etc), but in order to make them feel secure, they now have a list of multiple operators – and potential buyers – in the event of a loan default.
Watchfire Digital Outdoor has worked with over 200 billboard companies to help them build their business. When you are ready, we can help you to assemble your presentation or cash flow statement spreadsheet. Our Preferred Program is designed to assist operators with developing a solid plan for succeeding with digital outdoor.
For more inside information on digital billboard financing options, download our free guide, "Top 10 Things to Know About Financing Your Digital Billboard".