Employees of Platinum Capital Group dress in jeans and tee shirts and compete for prizes that include trips to Las Vegas. But don't call the company's style casual.
"As fun as it is, people pick the 12 hours a day they want to work," says Mark Moses, Platinum's energetic 33-year-old chief executive.
While Mr. Moses was exaggerating the number of hours, flex time and shifts that begin early in the morning or end late at night are common at the six-year-old company. And he stresses: "To participate in the fun of working here, you have to meet minimum standards of performance."
Platinum is a prime example of the kind of aggressive entrepreneurial company that can thrive during boom times. And these days, much of the fun at Irvine, Calif.-based Platinum is coming from the growth and performance of its home equity lending business.
Platinum funded $450 million in loans in 1997, including about $100 million in high-loan-to-value loans for debt consolidation. This year, it projects $750 million in loans, with about $150 million in home equity. Its average loan-to-value ratio on those loans is 110% and can go as high as 125%.
The company's revenues grew from $8 million in 1996 to $20 million last year. It expects revenues of $40 million this year and more than $100 million in 1999.
Platinum declines to release income figures. But Mr. Moses says its bottom line is growing, largely due to national direct mail, telephone, and Internet marketing campaigns for home equity loans and B&C first mortgages. In-house loan officers at 22 Southern California realty firms are helping to fuel Platinum's growth in conforming first mortgages.
Platinum does business in 40 states, but has offices only in California. This year, it hopes to enter New York and Chicago by purchasing mortgage companies. Plans for 1999 include an initial public offering or "an alliance with a deep-pocketed investor," says Jack Daly, the firm's chief operating officer.
Brett Dillenberg, Platinum's president and co-founder, says he and Mr. Moses plan to remain in charge.
That indicates more of the team-oriented fun that marked Platinum's "state of the company" meeting in January. After 180 employees of its three offices gathered at a hotel ballroom, Mr. Moses and Mr. Dillenberg entered riding an 8,000-pound elephant.
Platinum's owners began using an elephant as a symbol last year as part of a "think big" campaign. This January, they offered a Las Vegas trip to employees of the office that first met its 1998 goals.
By late April, the firm's Manhattan Beach employees hit a key target. Mr. Moses and Mr. Dillenberg congratulated them by showing up at their office on the elephant. In early May, the 40 employees traveled to Las Vegas-with one winning $15,000 in a prize drawing and four winning $500 apiece.
Since last year, Platinum has used an elephant symbol on its business cards and in its advertisements.
"We couldn't leave it out if we wanted to," Mr. Moses says.
Moses has shown an ability to motivate young employees since his days at Wilfred Laurier University in Canada, where he founded and franchised a company called Student Painters. After moving to California, he launched a U.S. affiliate of the company, which hires college students to paint houses.
In 1989, he bought a house through Mr. Dillenberg, a top-producing California mortgage banker. Mr. Moses sold his painting company in 1992. They launched Platinum the following year, building it around Mr. Moses' "thinking outside the box" marketing strategy and Mr. Dillenberg's mortgage industry experience. Mr. Daly, previously a senior official at Fleet Mortgage, joined Platinum last September.
Mr. Moses and Mr. Daly are based at Platinum's Irvine office, which coordinates the firm's home equity and B&C lending activity. Mr. Dillenberg runs offices in Manhattan Beach and LaMirada, which focus on first-mortgage lending in Southern California.
"If you came through our Irvine building, you'd think, 'What are all these kids doing here,'" Mr. Moses says. "The majority of our people are fresh out of college, with no mortgage experience. We teach them to do it our way."
The Platinum way is heavy on customer service skills which, according to Mr. Moses, haven't always been at the forefront in mortgage companies. To reinforce Platinum's "people skills" direction, Mr. Moses and other executives provide each employee with an hour's sales training every day.
In 1996, Platinum began its national subprime marketing effort. Its program includes radio ads for B&C loans, airing in Los Angeles and rotating among other major markets. Meanwhile, it developed a data base of "credit-quality impaired" homeowners who are candidates for debt consolidation.
Mr. Moses says direct mail and phone marketing, in that order, have been the biggest sources of Platinum's home equity loans. Since late last year, the Internet has been the initial contact point for 11% of its home equity borrowers.
"Within 24 hours, we will have a person from our Irvine call center in touch," Mr. Daly says. "Even with the Internet, you have to remember that the lending process is one where consumers want to have their hand held with a personal touch."
Mr. Moses says Platinum spent "significant time and effort learning how to take advantage of all avenues" of its web site. While not revealing details of that testing, he looks for the firm's Internet-induced originations to grow significantly.
Mr. Daly says interest rates on Platinum's debt consolidation loans are "generally in the neighborhood of 13%" and that the typical customer is consolidating credit card debt typically costing about 20%. He says Platinum's points and fees structure are "competitive" with other national high-LTV lenders.
Michael McMahon, an analyst for UBS Securities in San Francisco, says one privately held lender of similar size to Platinum generates about 12% of revenues from fees and points from a combination of originations and sales of high-LTV debt consolidation loans to investors. That figure is about 3% for some large conventional first mortgage lenders, he says.
Mr. McMahon, who does not actively follow Platinum, says investors won't have a full read on the new breed of home equity lenders until the mortgage market goes through a down cycle.
Mr. Daly says Platinum's product and geographical diversity and its cost structure make it well-prepared for a downturn.
"We are covering a national base from a single distribution center, and we have a variety of marketing avenues for several products," he says. "We don't have a network of brick-and-mortar, which can become very inefficient and make it difficult to accommodate a down cycle."