Billboard Insider has been running an interview series with Fairmount Outdoor President Billy Tolson. Billy has talked about finding his way from child acting to the out of home industry, what makes a good billboard lease and what it’s like to run a murals business.  Today he talks about how to finance your out of home company.

How have you financed your out of home business

We’re focused on two things that require financing: easement purchases under our existing structures, and new builds. We do both exclusively with bank financing. We aren’t asking for much per deal, which helps. I’m hopeful that when it’s time for a big acquisition, I’ll call lenders like Stark, Verde, or Billboard Loans, depending on size. Private equity is there for the bigger deals too, but it comes with a mandate, a five-year timeline, an exit strategy, and for the first time, a boss.

Banks are accessible

I’m thankful for regional banks and relationship banking! We have relationships from our development deals over the years, and once they learned the billboard business, wouldn’t you know it, they came to prefer the high-margin, cash-flow world of OOH over raw land development. Easement purchases make sense to them, and we consistently pay those loans back in year four or five. New builds fit too: the cash flow clears their DSCR, so they’re happy to do as many as I can bring them at 80% of CapEx. Banks tighten every cycle, but things have been good for us since 2011.

Do you personally guarantee?

Yes. With the margins this business carries, I just don’t see the concern.

What do you know now that you wish you knew when you started in out of home

I wish I’d recognized earlier the importance of ever-changing regulations, and how quickly you need to capitalize on a good location once you find it. Most of my wish list is “I should have gotten on that quicker.”