Yash Mody is an experienced entrepreneur who has been working with FintruX as a Business Advisor since the beginning of the project in 2017.

Having co-founded and built a business from scratch, Yash knows the difficulties that surround SME’s (Small Medium Enterprises) in their early stages. We have conducted a short interview to learn his story and why he thinks FintruX Network will revolutionize the financing industry.

Q: How did you end up as an advisor for the FintruX Network?

Well, I had already met Nelson Lin on more than one occasion at the CFLA (Canadian Finance & Leasing Association) conferences and had been impressed by the fact that his securitization software is servicing over 90% of the bulk funding market.

Nelson is a prominent name in the financing industry, known to many large financial institutions as a reliable provider for mission-critical software. When I heard that he was working on a new blockchain project called FintruX, with an unique proposition to make unsecured loans highly secure, I immediately understood how groundbreaking it would be for the lending industry and made sure to be a part of the initiative.

Q: Tell us a bit about your experience starting a company.

Some years ago, I co-founded a company which my business partner and I started with our own capital. Our goal was to complete the initial launch, and once it was established, we would approach financial institutions to raise the required additional capital that would enable us to take our business to the next level.

Q: How did you raise capital for your business?

Within the first year, we’d already managed to establish the business and quickly started growing our client base. Despite us having very good personal credit scores and having strong Total Net Worth, banks were not willing to finance us. They required us to have multiple years of sustained business operations and incremental growth to even be considered for a loan.

With each passing year, we would submit our financial statements, proving we were profitable and growing. However, each year they would continue to tell us that they needed a longer history of operations. The fact of the matter was that when we needed the money the most; we just couldn’t get it.

It was only after several years of trying, after we built up our business credit, we started to get some positive feedback that they would consider our application.

Q: So it took quite some time, but in the end, did you successfully get funding?

We prepared all of the paperwork for the loan application and there was a lot! It included business operations manuals, biographies of the founders, details of our employees, business operations guidelines, client portfolios, financial statements, annual profitability metrics, and the list goes on; I’m sure you get the picture.

On top of that, they required us to complete personal loan applications to additionally provide a personal guarantee above and beyond the credibility of our business.This was despite our decade long successful business history, our strong social connections and deep academic knowledge of our trade. The banks were clearly only concerned with a very narrow definition of what constituted an acceptable client profile in their eyes.

What followed was the lengthy and overly strenuous process of actually processing our application. We went back and forth over minor details and had countless clarifications. Of course, all this time and effort in the business world translates directly into more cost, which nobody needs. Time is money and delays get expensive, whatever industry you’re in. Our business operations were being hampered with this extraneous process and we couldn’t grow the business without this much-needed capital. As the process moved forward, the Credit Application proceeded into the Preliminary Assessment document,then a Company Audit,then a Letter of Intent which then finally proceeded to a Loan Agreement. During many of these stages, we had to engage our legal counsel to review and advise which again adds cost.

Q: Were you also considering other options than to getting a loan from a bank?

Yes, indeed. As the process took such a long time, we decided to start approaching other options. Banks are great because they can provide low interest rate loans. However, we started talking to other organizations such as Credit Unions, Private Equity companies and other financial institutions. We were always challenged by so many limitations that all the companies had. Some lenders don’t finance certain industries; some lenders don’t finance start-ups or companies with less than five years of operations; some companies don’t offer competitive rates; some companies have very expensive application costs; so, in the end, we would end up back at square one and looking for another option. Finally, when we did get the bank financing approved, the terms and conditions weren’t favourable for the business. In the end, our first round of financing didn’t even come from a bank or a credit union, but in fact a larger competitor within the industry!

So, it took a LOT OF SEARCHING way over and above what we were ever expecting, but finally we were moving forward.