Project Financing
“Leasing signs has provided the means whereby hundreds of businesses could benefit from on premise advertising without crippling needed capital for their own business. Our sign leasing program has enabled countless businesses to succeed, grow and flourish.”
— Thomas Young, Founder, YESCO
Advantages of Leasing On-Premise Advertising
Signs are an advertising medium that provides businesses with:
- Essential identification.
- Point of purchase advertising.
- Communication of the business image.
Many YESCO clients choose to pay for their on-site advertising much as they pay for other forms of advertising. They pay for it as they use it—month-by-month. The advantages of project financing include:
Liquidity
A YESCO lease conserves cash for inventory and business operations.
Maintenance Service
Full maintenance service is included in the monthly lease payment. Maintenance services such as cleaning, lamp replacement, and maintenance of applicable electrical or electronic components do not have to be separately contracted or arranged.
Present Value and ‘Apples to Apples’ Cost Comparisons
When clients apply present-value-of-money calculations to the time period of the lease payments and compare that to expected costs associated with an outright purchase over the same period (including future maintenance, insurance and property tax costs) they further realize the advantages of leasing. Most capital budgeting decisions, or decisions involving time payments, are made considering the effect of present value. Please ask your YESCO representative for a Lease vs. Purchase (‘Apples to Apples’) Analysis on your planned sign program.
YESCO offers two lease products—a Full-Service Tax Lease and a Finance Lease.
Financing is critical for your out of home business. In February we ran articles about Formetco’s Digital Billboard Financing Program and Formetco Financing to Replace Aging Billboards. Today we talk with Tony Hull about Yesco’s financing programs.
Contact: Tony Hull
Email: thull@yesco.com
Phone: 801-464-6482
Yesco provides lease financing for digital billboard conversions and digital billboard construction nationwide. Insider talked with Tony Hull, President, YESCO Financial Solutions.
Talk about YESCO’s history in out of home finance
YESCO has offered financing for on-premise sign projects going back to the early 1920’s. We’ve long seen signage as an asset category that banks and other lenders struggle to understand from a collateral valuation perspective. And as our own OOH business, YESCO Outdoor Media, expanded over the last several decades, we didn’t see a lot of lenders filling the financing need for digital conversion or new digital construction. So we’ve expanded our offering to include off-premise billboard financing to the OOH industry. We understand OOH asset values and the unique challenges faced by OOH operators because of our many decades operating an OOH business.
What transactions are you seeking?
We focus on digital billboard construction and digital billboard conversions. We are comfortable with product from all the major manufacturers (Daktronics, Prismview, Media Resources, Watchfire, etc…). We have no minimum size transactions and typically max out at about $2MM in overall exposure. We finance each billboard separately so if a company comes to us to do more than 1 transaction we’ll set up each build as a separate lease. We can finance startups if management is sound and experienced.
What are typical lease terms.
Our typical project is 6-12 months of interest only payments followed by a 5-year term. The interest-only option allows for some time to reach occupancy targets on a new digital display. Our interest rates range from 5.9% to 12.9% depending on the credit of the borrower. We typically will ask anyone owning more than 20% of a borrower to guarantee the lease. We have no prepayment penalty.
What trends are you seeing in the sign markets right now?
We’re seeing a nice increase in activity as the economy reawakens post-pandemic. Projects that were previously put on hold seem to be coming to life. Many of our customers however retain a bit of skepticism around how quickly the economy will fully recover and are therefore using financing as a tool to move projects forward without depleting much needed liquidity for reserves.
For more information about out of home lenders visit the Signvalue/Billboard Insider list of out of home lenders.