Two veteran Philadelphia financiers -- mortgage-lending boss Brian Simon and IT company-founder Joseph Greco -- have started CapitalFront LLC, a new business lender offering money, at rates from the high 10%s to the mid-30%s, to companies with sales from $350,000-$20 million, for businesses or projects that banks won't fund.

Simon joined Greco last fall after quitting his COO job at the New Penn Financial home-mortgage company, which CEO Jerry Schiano built from scratch (starting in the recession year 2008) to employ 2,000 across the U.S. (350 at its Plymouth Meeting headquarters) making $7 billion+ in home loans last year. 

Ex-colleagues keep asking: "Who leaves a high-paying job at a big company" for a loan start-up? Simon asked, laughing. He tells them business loans "have a lot of similarities to the mortgage business" -- but with less delaying regulation (he's a former member of the Fannie Mae and Freddie Mac advisory boards), less of the streamlined competition national lenders like JPMorgan Chase and Bank of America have introduced into home lending -- and less financial dependence on big investors: Home lending means a constant hunt for funding; Schiano sold New Penn to New York hedge fund Shellpoint Partners in 2011 to secure growth financing.

Simon is ready now "to avoid working for someone else," he told me. "Relative to mortgage, there's a lot of upside" in uncollateralized business lending: "It reminds me of what the mortgage business looked like 20 years ago. It seemed like a natural fit."

Greco sold a controlling stake in his previous business, Valley Forge-based payment tech company PSC Info Group (now part of RevSpring), then in 2014 acquired the former Lawsuit Funding Solutions, a Center City company that financed legal settlements; he renamed it Thrivest Legal Funding, and added a financial hedge-fund affiliate, Thrivest Specialty Funding (corrected). Both are based at Two Penn Center (1500 JFK Boulevard). CapitalFront is in Conshohocken. Together the firms employ 50, including 20 at CapitalFront.

"We will hire 25 to 35 over the next several months," Simon says. Mostly loan officers and account execs, also some operations and risk-management people.

Business loans aren't as labor-intensive as mortgages. Simon expects to recruit home-lending talent from past giants like GMAC, PHH and Freedom: "The talent pool in this area for this work is quite deep. The skills are transferable" and the industry "is more favorable in regard to regulatory and compliance issues."

Typical borrowers are "in seasonal businesses, trying to get through their downtime," or franchisees upgrading stores to meet new company guidelines; owners seeking to acquire competitors; contractors who need to buy equipment for a large project or a new customer. The partners also plan to move into secured lending.

Simon was previously CEO at Caliber Home Loans (corrected) in Dallas, and COO at Freedom Mortgage in Mount Laurel.

Besides fixed-rate financing, CapitalFront offers merchant cash advances, receivable-based financing, factoring and government-guaranteed Small Business Association loans.

"We saw a need for sophisticated [tech-enabled] financing options geared toward independent businesses, sole proprietors, LLCs, and other owner-operated companies whose needs are not being met by bigger institutional lenders," said Greco in a statement.