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What makes your Tower Lending Program unique?
The biggest difference is that traditional lenders do not consider wireless leases an asset as they are cancelable, but we do. As a result, we can offer you a non-recourse loan that does not require a personal guarantee, advances up to eight times your current cash flow, and uses only the leases as collateral.
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What’s the best way to raise capital to grow my small tower company?
When it comes to raising capital, tower owners are in an advantageous position because they have several financing options – leveraging existing towers, selling them, or selling the leases on them. Which option a tower owner chooses depends on his immediate capital requirements and long-term business goals; but to make an informed decision, one must understand the pros and cons of each of these options.
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I want to borrow against my five-year-old tower with two investment-grade tenants. Why can’t I find a bank that will offer me attractive loan terms?
Although your tower may be generating thousands of dollars a month in net tower cash flow, most banks think that vertical real estate is not leveragable because they tend to use lending rules that don’t work well for the tower industry. Banks only consider fee-simple real estate as real property. All other forms of collateral are considered personal property. Consequently, even if you have high-quality cash flow from investment-grade tenants, banks are forced to consider the cash flow risky. Finally, the at-will termination clause in these leases further lowers banks’ appetite to offer a loan.
The cure for this lending nightmare is to find long-term lenders who use only the tower as collateral and do not require personal guarantees.
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