One of B.C.’s newest subordinated debt lenders has closed its first deal less than two months after its launch.
“Business has been really brisk. We closed our first deal before Christmas, and there’s another 25 deals in the pipeline,” said Robert Napoli, vice-president of First West Capital.
First West Capital opened its doors in late October and is the first subsidiary of First West Credit Union, which was created last year from the merger between Langley’s Envision Financial and the Okanagan’s Valley First Credit Union.
Together, First West has more than $5.6 billion in assets under administration, making it the third-largest credit union in B.C. after Coast Capital Savings and Vancity.
First West Capital has $60 million in funds available to businesses looking for growth capital or need funds to facilitate an acquisition, management buyout or other major business transaction.
“Our focus is on companies that are early stage for senior debt [from the banks], but growing and becoming cash flow positive very quickly,” Napoli said.
As the first subsidiary of First West, Napoli noted some people are initially curious about the company because they’d never heard the name. Until now, it was not a public-facing brand since the merger between Envision and Valley First was predicated on the concept that both credit unions would retain their consumer-facing brand of the organization. Any other mergers would benefit from maintaining their community recognition and control.
But First West is taking the opportunity to tap a valuable niche in the financing market that is under-served.
“We want to become the go-to option for the banks for deals under $5 million. What we’re finding is that the banks like that because we’re not a threat. We’re not doing senior debt, just offering sub-debt as an additional tool to service their clients.”