This is the second of Billboard Insider’s profiles of out of home lenders. Last week we profiled Alerus Financial. Today we profile Stark Capital Solutions.
Out of Home Lender: Stark Capital Solutions
Address: 5829 N. Post Rd, Indianapolis, IN. 46216
Email: cstark@starkcapitalsolutions.com or cberry@starkcapitalsolutions.com
Phone: 317-546-6038
Loan Amounts: $500k and up.
Stark Capital provides debt and equity to out of home companies. Billboard Insider talked with President Chris Stark and Partner Craig Berry.
What’s new at Stark Capital over the past year?
We continue to experience remarkable growth. Over the past twelve-months, we have closed 26 transactions, with 12 being from Q1 of this year. We contribute a large portion of our growth due to traditional lenders tightening credit, and operators realizing they need a dependable lender rooted in OOH. Our ability to get transactions closed quickly and with a high degree of certainty has really fueled our growth.
What size lending transactions do you want to do?
Ideally $500k – $5 million. We have capabilities to fund larger transactions ($10-$20MM), but our bread and butter is < $5MM.
How big is your out of home loan portfolio?
$40 million and growing!
What pricing trends are you seeing?
When the Feds started the rate spikes, we began repricing our loans on an annual basis based off the Prime Rate. We are continuing this trend as we believe rates will start inching down over the next 12-months.
Do you require a third party appraisal?
With some of our loan programs we require opinion of value reports when a loan balance exceeds a certain limit. We have had a great working relationship with Paul Wright at SignValue.
What trends are you seeing in the financial and out of home markets?
For Stark Capital, we continue to see strong support from our existing bank partners and investors. Investors love the out of home story…high barriers to entry…recurring cash flow…strong valuation to development cost ratio…outstanding loan performance…etc. We enjoy educating our bank and investor partners and bringing on new and additional capacity to support our lending activity across the OOH Industry.
For OOH borrowers, we are seeing two things:
- Operators reluctant to pull the trigger on new development projects or acquisitions due to higher interest rates. After specializing in OOH-lending for 20+ years, we have navigated numerous economic cycles. With the M&A market continuing to get stronger over time, and realizing new site development or strategic acquisitions is a closing window of opportunity, we feel the opportunity costs of not capitalizing on these opportunities far outpaces the higher rates. In fact, we recently dove into the numbers on the minimal effects higher interest rates have on new billboard projects – read here: Stark Capital Article
- We continue to see other lenders struggle to fully approve and close OOH loans. In a period of tightened credits, finding reliable lenders who are actively closing transactions in an efficient manner is so critical to your overall business success. Simply put, less time spent on securing debt translates to more time building signs and selling ads!
To have a conversation about Stark Capital and Out of Home Lending, contact Chris Stark at cstark@starkcapitalsolutions.com or Craig Berry at cberry@starkcapitalsolutions.com.
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