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Short Term Loans Bring Long Term Gains

FINANCE: Fidelis Total Bridge Loans Top $125M

FREEA four-year-old company specializing in short-term loans on real estate projects as they are being built, has grown dramatically in a tight market.

John Lloyd
CEO, President & Co-founder
Fidelis Private Fund

John Lloyd, who runs in ultramarathon races of 50 miles to 100 miles, formed Fidelis Private Fund in 2019 with partners Chad Ruyle and Jon Maddux with $2 million in capital and a determination to make a go of it.

Since 2019, Fidelis has financed more than $125 million in real estate bridge loans, mostly in San Diego County, with 119 accredited investors, Lloyd said, adding that Fidelis has consistently provided investors more than an 8% return.

Bridge loans, as the name suggests, are loans that bridge the gap between the time a developer starts a project and when the developer finishes it and can get permanent financing.

The loans Fidelis makes are at a higher interest rate than banks charge – 10.5% to 11% in June – but they are usually for two years or less.

“Nobody wants to pay our interest rates very long, so it’s almost like they’re incentivized to get out,” Lloyd said.

The advantage for Fidelis is that it gives Fidelis investors a quick return and money that Fidelis can use to lend out.

Typically, Lloyd said that Fidelis borrowers need their money faster than a bank can provide it to capitalize on deals that pop up quickly and don’t stay on the market long.

By moving quickly on the deal, buyers can get property at a discount, Lloyd said.

“There’s no way a bank can perform in a short period of time, like 10 days,” Lloyd said. “If somebody needs to close that fast, I don’t care how big they are, how strong they are, they’re not going to get it from a bank because of the timing.”

Fidelis also loans on projects that banks won’t – maybe they are buildings that are in need of significant renovation.

“We call these value-added projects,” Lloyd said.

Often, the renovations include adding apartments to a building to increase its value.

Personal Touch

Daniel Shkolnik, founder and CEO of Atlas West Group, said that he’s financed more than a dozen projects through Fidelis.

Daniel Shkolnik
Founder & CEO
Atlas West Group

“Fidelis is different because they are relationship based. They don’t just look at a project. They really understand their borrower, their business model, and they also get creative in the way they structure deals,” Shkolnik said. “I’m able to pick up a phone and call John and use him as an advisor and work through issues right then and there. He can also give you more loan dollars than a bank. Banks are sometimes overly conservative and have a hard time looking at what will be. They look at what’s there now.”

Of late, Fidelis has been making loans to developers and homeowners for the construction of accessory dwelling units, also known as granny flats.

Lloyd said that he and his partners chose Fidelis as the name of their firm because the word means faithful and loyal “with the ideas of steadfastness and fidelity in relationships, beliefs or principals.”

Inspiration

An ultramarathon runner for the past 20 years, Lloyd, 59, said that running gave him the mental toughness and the goal-setting skills he needed in running a business.

Ultramarathons are any race that’s longer than the standard marathon of 26.2 miles. Typically, they are 50 or 100 miles.

“Ultramarathons are physically and mentally demanding, often requiring you to push through fatigue, pain, and moments of doubt,” Lloyd said. “In business, setbacks and failures are inevitable, but the ability to bounce back, learn from mistakes, and keep moving forward is crucial.”

Running also taught him perseverance and resilience along with the ability to concentrate on the goals he set.

Lloyd has run as far as 100 miles, which he did in 2011, when he placed 26th among the 97 runners who finished. He’s scheduled to make a 50-mile run in July. He’s also run the 42-mile Grand Canyon Rim-to-Rim run three times, finishing in about 11 hours.

Before forming Fidelis, Lloyd was president of a different San Diego financial firm, The Loan Company of San Diego. He said that he formed Fidelis because, “It was an opportunity to be an owner and not just a manager.”

Besides running ultramarathons, Lloyd posts brief inspirational message videos on the firm’s website, many of which are selfies that he takes during a pause in a run.

“I want to provide encouragement, remind people of their potential, and offer support in pursuing their goals or overcoming obstacles,” Lloyd said.

Fidelis Private Fund

Founded: 2019
Headquarters: Carmel Valley
CEO: John Lloyd
Business: mortgage fund/real estate bridge lender
Employees: 4
Website: www.fidelispf.com
Contact: 760-258-4486
Notable:  Fidelis has financed more than $125 million in real estate bridge loans.

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