This is the fourth column in Billboard Insider’s series on out of home debt. We’ve previously discussed factoring, lease financing, and bank financing.
Today we talk with Craig Berry of Stark Capital to discuss the pros and cons of using a private specialized lender to finance and grow your OOH company.
Private lenders are non-bank lenders who focus on specific asset classes or industries — in this case, out of home. These lenders typically use a combination of private investor capital with bank leverage, and structure loans around the unique economics of billboard assets.
The Pros of Private Financing
Speed and Reliability
Private lenders are not subject to bank regulation and annual loan exams. Credit decisions are usually made by a small committee or even a single decision-maker. This often results in working directly with the key decision makers, faster approvals, and a higher degree of closing certainty — especially important when bidding on acquisitions, getting new steel in the ground before inclement seasonal weather conditions, or negotiating high-profile builds with sophisticated corporate or municipal property owners.
Deep OOH Expertise
Specialized OOH lenders, such as Stark Capital or Billboard Loans, have completed hundreds of billboard-specific transactions over 20+ years in business. As a result, their underwriting is more tailored to the quality of billboard locations, the experience of the management team, and the underlying property documentation. Traditional banks focus more on historical company profitability, owner net worth, and credit history. Specialized lenders understand the niche nuances that drive market value and do not need hand holding or educating to understand the merits of a project.
Flexible Underwriting
Private lenders are often comfortable underwriting based off proforma cash flow. This comes from their experience dealing with numerous operators, and having history and confidence in how new signs ramp up in performance. This is incredibly important for financing new builds, digital conversions, or turnaround acquisitions. Traditional banks that lack this experience will often shy away from proforma based projects, or require significant borrower capital to be invested in the project.
Creative Structures
Many private lenders can offer non-traditional financing structures such as longer interest-only periods, cash flow sweeps, subordinated debt, and utilizing equity value of existing assets in lieu of cash equity investment from the borrower.
Less On-Going Involvement
Traditional banks often have monthly or quarterly reporting requirements, covenant testing, audits, and appraisals. These items take time and can pull operators away from focusing on growth. Specialty lenders are often more hands off in terms of reporting and oversight.
Staying Power Through Cycles
Private lenders tend to remain active during economic slowdowns and tighter credit markets. Because they have navigated multiple economic cycles (i.e. 2001 dot-com recession, 2008 housing crash, and the 2020 covid pandemic) they are less likely to exit the industry during recessions or periods of market volatility. This is in contrast to traditional banks that will often pull back on niche lending when the economy is soft.
The Cons of Private Financing
Higher Cost
Private debt is more expensive than bank financing. Rates are generally higher than banks but lower than factoring, lease financing, or private equity. Borrowers are paying for speed, flexibility, and reliability.
Smaller Loan Sizes
While some private lenders can write large checks, many have lower individual loan limits compared to large commercial banks. This may require multiple loans on the balance sheet or diversified sources of capital for large acquisitions or portfolios.
Fewer Ancillary Services
Private lenders typically do not offer operating accounts, treasury management, trust services, or personal banking products. The relationship is focused almost entirely on financing rather than broader banking needs.
Stark Capital’s Take
Private financing fills an important gap in the out of home capital markets. It is rarely the cheapest money available, but it is often the most reliable, flexible, and execution-focused option — particularly for acquisitions, recapitalizations, or growth strategies that don’t fit neatly into a bank credit box.
Many successful out of home companies use private lenders alongside banks, tapping each where they make the most sense. The key is understanding your company, timing, and growth strategy — and matching it with the right type of capital.
Stark Capital will be running an OOH financing mini-series in Billboard Insider starting shortly.
If you would like to discuss Stark Capital’s financing options for your OOH company, reach out to cberry@starkcapitalsolutions.com.
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