Billboard Insider gets lots of calls from individuals seeking out of home loans from its Billboard Loans, LLC affiliate.  Here are 5 tips on what to do to make the first conversation with a lender productive.

Say your name and company name after hello. 

It’s amazing how many people start an introductory lending conversation with “Do you make out of home loans?” or “How much do your loans cost?”  No one wants to talk to a disembodied ghost in the cloud.  It’s common courtesy to introduce yourself and identify your company before you start talking or asking questions.

Know how much money you want and for what.

Have an answer when your banker asks “how much money do you want?”  You’ll look professional and prepared.

• I’d like $250,000 to construct a digital billboard.
• I’m looking for a $1.5 million loan for an acquisition.
• I want $120,000 to construct three static billboards.

The worst answer you can give is “I’d like to borrower as much money as you can give me.”  You’re banker won’t think it’s funny.

Introduce yourself when you don’t need money.  

When Insider worked in commercial banking the first thing his credit officer would ask when a new borrower showed up was “how long have we known him or her?”  The longer a banker has to get to know you the more at ease they will be handling your request.  Trust takes time.  Approaching a bank early also allows you to weed out lenders for whom you are too big or too small or in a difficult industry.

The most impressive individual we’ve encountered in 25 years of private media lending told us in our first conversation that he didn’t want a loan.  He wanted to know our company’s lending criteria.  A year later he came back and said “I meet all the lending criteria you gave me at our meeting a year ago and now I’m ready to borrow.”  Introduce yourself when you don’t need money and listen when your lender talks about lending parameters.

Know your trailing 12 months revenue and trailing 12 months cashflow.

If we know a borrower’s trailing 12 months revenue, trailing 12 months cashflow (earnings before interest, depreciation, amortization and income taxes) and requested loan amount, we can make a snap judgement on the feasibility of the loan.  Prudent out of home leverage is 3-5 times annual cashflow.  It’s a level where you can pay off your debt over 10 years without any increase in revenue or cashflow.  5-6 times is high.  Above 6.0 times you’re at the mercy of the next recession or covid event.

Get a referral.

A first conversation is easier if you’re able to say “I was referred by ______, one of your clients.”  It will put your banker at ease.  Ask your friends in business where they bank and ask for an introduction if they’ve had a good experience.

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