Using a Cell Tower Lease as Collateral for Obtaining a Loan

Using a cell tower lease in order to obtain a loan, especially if the amount is considerable and your credit scores are not that good, you will need to bring in collateral. A cell tower lease would, obviously, be preferable to your home, car or other similar assets or, if these were already used for different loans, it may be your only solution.

However, there are certain conditions that have to be met in order for you to be able to use the lease as collateral. One of the most important conditions is the lease period, which should cover the loan period.

Most carriers sign long term lease contracts, but insert special clauses in their contract that allow them to terminate the contract with just a few months’ notice. In this situation, the lenders will consider the notification period as lease period, as they have no guarantee that the contract will not be terminated after the mentioned period.

There are, however, two approaches you may try, but, before proceeding, you need to know exactly how much money you need and how much you can afford to pay as installment every month.

If you blindly accept the first deal you are being offered and you realize you cannot live up to it, you may lose a significant amount of money and ruin your credit scores, and that is certainly something you do not want.

As soon as you have that settled, try:

1. Discussing with the Carrier and Having the Terms of the Contract Adjusted

If the carrier intends to maintain the deal with you for a long time, he may agree to change the notification period or even to renegotiate the lease or pay it in advance, and, thus help you solve your financial problems without taking a loan.

2. Discussing with Potential Lenders and Explaining the Situation to Them

Due to the tight competition, many lenders have become more flexible and easier to work with, and may agree to offer you the money you need, even if the lease contract clause is not exactly in your favor. One condition would be for you to have good credit scores, to have paid all your debts on time and prove that you are responsible and reliable.

Some lenders may have even granted other loans based on the lease paid by the respective carrier and know that the several months notice for termination is just a precautionary measure that is rarely taken advantage of. Others may consider the time period in which the lease contract has already been effective and use it to assess the risks regarding the termination of the lease contract.
When discussing with the two parties, you should not let desperation get in the way. The carrier may try to take advantage of your situation and ask you to agree to a lower value of the lease in exchange for renewing the agreement, in which case you could lose a significant amount of money on the long term.
On the other hand, the lender may try to make you look like a client with a high risk potential and impose higher interests and commissions, in which case, you would end up repaying twice the amount you borrowed or more.

That is why, before making a decision or signing any deal, you should explore both approaches and see which one is more advantageous.

Other solutions you may try are:

  • Finding another cell company and signing another lease contract, with terms that will allow you to use it as collateral – it will probably take some time and there is no guarantee you will find one to agree with your terms.
  • Using the land the cell tower is placed on as collateral, and not the lease contract – in case you do not keep up with the payments, you will lose both the land and the lease for the cell tower.