Although she's not in the food services industry, Denise Vecera helps Houston restaurants put meals on their tables.

Her company, First Vision Financial, secures loans and lease finance contracts for restaurant owners needing new equipment, so that whether up-front or at the last minute, her clients may keep feeding hungry customers.

Vecera launched her business in 1997 after identifying a niche in the market. She previously leased computer systems to restaurants, and repeatedly saw banks refuse to give these businesses loans -- often because a restaurant owner's credit score was a poor reflection of their actual success.

So Vecera decided to start a company to help entrepreneurs in this sector.

First Vision has watched its portfolio grow by about $1 million annually in each of the past few years to a current value of about $8 million. As a result, the company saw a 15 percent jump in revenue between 2004 and 2005.

Don't bank on it

First Vision negotiates directly with restaurant owners, taking a hands-on approach in order to minimize the company's risk.

When taking on new clients, First Vision works to understand what the restaurant owner has to offer the industry and community, Vecera says. The company spends as much time is necessary to understand a client's business before shopping for a loan, which Vecera says tends to keep First Vision's client base small.

But that is by design.

"We have a strong portfolio in a high-risk industry," she says.

Vecera says that because the restaurant industry is considered high-risk, banks tend to shy away from hospitality-industry loans.

"The risk of repayment is not always good, and people think because a restaurant is full it's making money," she says. "Most people don't realize all the expense that goes into opening a restaurant and building it out and running it."

Because of that, First Vision takes a more local approach.

"There may be a chef in town who may not have excellent credit, but he has the background and knowledge and location and employees behind him," Vecera says. "The risk to us is a lot lower than the way a bank would look at it."

First Vision helps clients secure loans or equipment lease agreements through banks or other financing sources, typically through what she calls "private label programs," that are set up specifically for her company.

In addition to helping owners finance equipment up-front through a thorough planning process, First Vision also swoops in at the last-minute when costs of securing new equipment unexpectedly rise.

Vecera says her services often come into play when a restaurant opening gets delayed, which can add to the planned start-up costs.

"It's kind of a Catch-22 because they have in their budget that their kitchen's going to cost $100,000, and it ends up being $120,000," Vecera says. "That's where we come in."

First Vision also helps clients update existing equipment so that when a stove starts smoking or furniture begins to wear out, they receive a loan to fix what they need.

Rapid rewards

Potential clients begin the process of securing a loan by filling out a one-page application with First Vision, which is reviewed within 48 hours by Vecera and her staff. Applicants are notified within a couple of days of the decision, and if approved, a contract is drawn and signed within a week.

Customers receive 100 percent financing, which may include money for equipment installation, maintenance and service -- items often turned down by traditional banks -- and terms may be anywhere from one to five years, though most are 36 months.

Two payments are required up-front, typically equaling about 10 percent of the total equipment costs.

Vecera says First Vision's client list includes new and existing restaurants, most of which come to First Vision through word of mouth.

Gary Adair, owner of the Skeeter's Grill restaurant chain, began working with First Vision in 2000. His relationship with the company has accelerated since his restaurant group expanded.

"I find the equipment I want and strike the deal, and First Vision helps me fund it," Adair says. "Sometimes I don't have the money to spend, and sometimes I have it but don't want to spend it."

In addition to funding equipment he uses on a daily basis, Adair says First Vision has at times connected him with lease deals that were better than those he might find on his own.

The need for a piece of equipment often comes during an emergency, giving Adair little time to shop around. On some occasions, Vecera uses her contacts to help him find a better match.

Typical First Vision equipment loans range from $10,000 to $250,000 for items such as computers, furniture, kitchens or sound systems, Vecera says.

The company also fills a niche by offering financing to business owners unable to secure funds through the U.S. Small Business Administration, which Vecera says currently faces a backlog of requests from small-business owners due to the country's recent natural disasters.

First Vision absorbs some of that fallout by processing five or six applications every day. Of those, about 75 percent are approved, and 80 percent of those are funded.

Vecera and her three full-time employees evaluate applications with an eye toward red flags, turning down applicants with little industry experience.

"If an owner does not want to sign an agreement on behalf of the company because he's scared that if the company fails, he'll be responsible for the debt, we consider that a red flag," she says. "Basically, we feel like he wants us to step up to the plate and finance, but he's scared to step up to the plate as well, which won't work. We're looking for someone who's going to meet us at the finish."

Vecera says another red flag would be someone who thinks that the restaurant industry is "fun" and is hoping to get into the business so they'll have a place to invite friends.

"They've been told they're really good cooks and throw great dinner parties but they don't have the experience," she says.

Some of First Vision's current clients include Berryhill Baja Grill, Skeeter's Grill, Truluck's Steak and Stone Crab, Perry's Grille and Steakhouse, Christie's Seafood Restaurant and nationally known chain Coyote Ugly.

First Vision receives a percentage of each loan agreement, depending on the dollar amount and term.

Between 2 percent and 3 percent of the company's total portfolio includes bad debt, Vecera says, which one of the downsides of operating this type of business. But Vecera says she is comfortable with that figure because it is actually below the industry average.

Next on the company's plate is expanding its client base, with an eye toward careful, controlled growth.

"Even though there are tons of restaurants and bars in Houston, it's still a small industry, so we gain business by word of mouth and referral," Vecera says. "That is how we like it. We are not interested in quantity, but quality."

Christie Taylor is a Houston-based freelance writer.

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