Remember When? Funders Talk About Their First Deals

It’s hard to forget the firsts, especially first deals — they set precedents, lay down the groundwork for policies and establish a starting point for legacy.

For funders and lenders, their first deal can be significant in establishing client relations, setting priorities for credit policies and as we found out, teaching them valuable lessons.

First Steps..Baby Steps

John D’Amico’s first bet was a small cafe in Carmel, Indiana that his company GRP Funding advanced $25,000 to, eight years ago. Reviewed on credit card sales, GRP looked at the business’ cash flow and deemed it a good risk to take, D’Amico recollected.

“That business model seems so far and long ago,” he said. “OnDeck was not a company at that point and loan products were not talked about. It was only advances.”

Would he still feel confident doing the same deal today? “Yes, that deal is still there to be had today. But you want to make sure that you’re not stacked.”

#LifeLessons: Don’t get comfortable, stay updated with the times and evolve and keep the credit risk policies fresh.

Small Can Be Significant

The first check, Jersey City-based World Business Leaders cut was for $7,000, back in 2011.

Chief revenue officer, Alex Gemici recalled that it was an African arts store run by a woman in Virginia Beach who paid back the loan in full and came back three months later for an additional loan of $12,000.

“We believed her story and went by our lending policy and the deal fit the bill.”

#LifeLessons: We could make a big difference even with a small loan.

Not All Firsts Are Good

But not everyone has a smooth start. For New York City-based company, Cardinal Equity, the first deal was a bump on the road.

The auto dealership in New Jersey that it advanced $250,000 to in 2011 defaulted on the second renewal. Although Arty Bujan, managing member at Cardinal Equity still thinks auto dealerships are a “nightmare,” his company still funds them but with very strict scrutiny, looking for ones with a steady revenue stream and a good amount of time in the business.

#LifeLessons: There’s always risk