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the key differences between a traditional bank’s underwriting vs. stark capital’s underwriting

The Key Differences Between a Traditional Bank’s Underwriting vs. Stark Capital’s Underwriting 

When working with a bank to grow your billboard business, it can be frustrating to work with a lender that does not fully understand your niche industry. With over two decades of experience helping billboard operators throughout the country, specialty lenders like Stark Capital Solutions are more efficient at getting loans approved and funded than a traditional bank. 

While both banks and specialty lenders look at the same factors, they prioritize their importance in different ways. Newer companies in the industry, or established companies that are quickly growing, tend to benefit more from the help of a specialty lender. Let’s dive into the differences:  

What Do Banks Value? 

1. Historic Profitability 

Banks prefer to work with companies who have been in business for a long time and show consistent trends of growth and profitability. 

2. Personal Net Worth & Credit History of Owners 

Banks want to loan money to businesses that are backed by owners with a strong personal balance sheet. They prefer to work with individuals who have a high net worth, significant cash and investments, and strong credit histories from past borrowing. 

3. Billboard Sites 

Banks focus more on the cost of the physical billboard structures when determining value. They do not understand market value as much as a specialty lender. 

4. Experience of Management Team 

Banks prefer to work with management teams who have successfully managed billboard assets in the past. 

What Do Specialty Lenders Value? 

1. Quality of Billboard Sites 

With industry-specific experience under their belt, specialty lenders evaluate more than just the cost of a physical billboard when determining the real value of the site. 

Since this is such an important factor for specialty lenders like us, these are the qualities we look for at Stark Capital: 

  • Market Type — Is your billboard located in a metropolitan or rural area? 
  • Traffic Count — Is the billboard located on a busy interstate or street? 
  • Competitors — Where are the nearest competing billboards, and how many are there? 
  • Potential Advertiser Pools — Is there a high retail density? 
  • Property Rights Documentation — What specific characteristics of the land lease or easement documents drive the market value? 
  • Permitting & Zoning — Can we easily pull a permit, or do we have to work through the variance process for a location approval? 
  • Vendor Experience — Are your vendors financially strong enough to back their warranties, and have they been long-time players in the industry? 

2. Experience of Management Team 

A quality billboard site is important, but we also know that an experienced management team is necessary to maintain consistent revenue. Specialty lenders want to see that the management team behind a company has successfully managed billboard assets in the past, especially since value is coming from revenue and cash flow. 

3. Personal Net Worth & Credit History of Owners 

While not as high of a priority as a bank, it’s still important to have owners that have handled their credit well. A high net worth is not necessary, but always a plus. 

4. Profitability 

The longevity and profit history of a company is helpful, but it is not the most important factor for specialty lender underwriting. With solid sites, specialty lenders are better able to get over the hurdle of a company being new, or not having a long profit history. 

If you’ve been in business for a while and already have a bank you like working with, there is no reason to make a change. However, if you’re quickly growing — regardless of your time in the industry — a specialty lender like Stark Capital may be a better fit for you. 

Stark Capital has built relationships with lenders and investors that help companies get access to the money they need to feel confident about growing their business. If you have new sites that you’re looking to develop, let’s talk about how Stark Capital can help you find the financing you need to succeed in the industry.