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LOANS — Partners Apply Job Experience to Online Brokerage



Recent Investment Capital Totals $36.5M

Oh, if Ford could see them now.

That’s where Gary Miller and Dave Zeller, CEO and president, respectively, of the San Diego-based E-finance brokerage PeopleFirst.com originally met.

Both started with Ford Motor Credit in 1980 and began developing a friendship. Then they developed a business plan and now a multimillion-dollar online auto and motorcycle financing brokerage for consumers with perfect credit.

“Over time, we came to realize that good credit-quality customers just weren’t being serviced properly, and we had a better idea,” Miller said. “With the advent of the Internet, we realized the Internet was a way for us to market and process these auto loans. It was a perfect delivery mechanism for the product.”

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In 1993, Miller left his home in New York and moved to San Diego to team with Zeller. Together they wrote a business plan and raised $1 million “from family and friends.” In the next 18 months, they didn’t finance a single car. Instead they built the technology to deliver their product.


– E-Brokerage Offers Multiple Loans

Finally opening in September 1997, PeopleFirst.com has since issued tens of millions of dollars in loans. The E-brokerage offers multiple loans with the maximum at $75,000. Customers can re-amortize their loans and discounts are offered for strictly Internet-based customers. So far, financing exists for autos, trucks and bikes only.

Located on the corner of Columbia and State streets in the First National Bank building, PeopleFirst.com employs roughly 125 people. They’re not all underwriters either. The E-brokerage has in-house marketing, system, administration, and finance operation departments.

The brokerage made reciprocal Website link deals with car buying sites, Autoweb.com, CarPoint, Kelley Blue Book, the National Automobile Dealers Association, and Yahoo! to lure car shoppers.

The brokerage also lured in some big-time venture capitalists. Three weeks ago, PeopleFirst.com acquired $36.5 million in investment capital led by Chicago-based Madison Dearborn Partners and backed by Morgan Stanley Dean Witter Venture Partners, Richland Ventures, American Express and Mail Boxes, Etc.

For Madison Dearborn Partners director Tim Hurd, it was the men in charge followed by the product that made PeopleFirst.com so appealing.

“We liked the management team. With a lot of these dot-com type start-ups you get a couple guys with a decent idea who have never run a business before. This is a very deep management team, all of which have significant industry experience. They understood the business; sort of industry guys who got on the Internet instead of vice versa,” he said.


– Product Is Still The Most Valuable Asset

But the product is still a company’s most important asset , especially, for an E-company.

The darling deal of this E-company is the “blank check.” It comes with the customer’s copy of the loan agreement and is exactly what it sounds like. Customers fill out the check; insert the vehicle seller’s name, the agreed upon sale amount, and sign it.

“We send out, effectively, a blank check,” Miller said. “(We) fax it pre-approved up to a certain amount to what the customer thinks they need and then they can take that check and buy their car from any dealership or, through our partnership with Mail Boxes, Etc., through an individual.”

Auto buyers with financing through PeopleFirst.com are not reliant on the dealership when purchasing a car or motorcycle.

“That feature really turns our customers into cash buyers and a lot of our customers like that,” Miller said. “It empowers them when they’re in a dealership. They know they can close the deal right there. They can negotiate their best price and then they simply write the check and they’re done.”


– Process Involves Series Of Time-Saving Steps

Completing the check is the last in a series of time-saving steps offered through PeopleFirst.com, Miller said.

“The whole process, really, can be just a few minutes of a person’s time,” he said. “It takes five minutes to fill out our application and then fill out the check and that’s all there really is to it.”

PeopleFirst.com customers are tied to the same note and security agreements as patronages of traditional finance brokerages. Pricing is set on general interest and market rates. The E-brokerage mover currently loans money to citizens in 47 states and the District of Columbia.

Being based on the West Coast isn’t a problem, either.

“We’ll overnight checks to people. We have people on the East Coast filling out loans (after business hours in California, Oregon and Washington) and we can still make FedEx and they can have the check the next morning if they want,” Miller said.

PeopleFirst.com excels at customer service, Hurd said. That was another reason he and Madison Dearborn Partners were content to deliver the largest portion of the latest investment to the E-brokerage.

“If you try to call your bank and ask a question about your auto loan, it’s kind of a pain. You call these guys, you can get someone on the phone right away.”

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