​The original Partnership, Phar-Way, was formed by Roy Pharis and Steven B. Dillaway as General Partners, with initial capital of $18,000. The Partnership’s primary purpose during the highly inflationary 1970s was to buy and sell “fixer-up” real estate.

The Partnership properties were sold, Roy Pharis was bought out, and the Partnership evolved into trust deed investments. Phar-Way II was formed and Steven B. Dillaway became the sole General Partner (GP), conducting Partnership business as a part-time activity. While its capital base had certainly grown, it remained small ($82,537 at January 1, 1985).

The GP acquired a line of credit directly to the Partnership, secured by its trust deeds and personally guaranteed by the GP. The aim was to increase the Partnership’s capital base, increase the Partnership’s yield, and decrease the Partnership’s risk.

The GP began devoting full time to the Partnership. At December 31, 1986, the Partnership capital was $270,828. By December 31, 1990, the net worth of the Partnership was $2,928,828.

The GP took steps to protect the Partnership in the event of a severe recession or his inability to continue as GP. First, the Partnership began investing a majority of its portfolio in First Trust Deeds, rather than junior trust deeds. Second, the line of credit terms were negotiated so in the event the line of credit matured and was not in default, the obligation would automatically convert to a three-year term.

These decisions proved prudent and protected the Partnership against the huge losses suffered by the savings and loan industry and others in real estate lending in the early 1990s. The Limited Partners’ average annual return for the five-year period ending December 31, 1995 was 9.99%!

The foundation laid in the late 1980s again proved itself in the Great Recession beginning in 2005 and enduring through the end of the decade (the official Recession was June 2007 through December 2009). The Partnership’s lowest return to Limited Partners during that era was 6.44% in 2010.

The Limited Partners Committee was established January 1, 1989. The Committee is composed of veteran business persons and attorneys who meet quarterly with the GP to review Partnership activities and advise in setting goals and policies.

Simultaneously, a licensing agreement with The Loan Company, a California Corporation, wholly owned by the GP, allowed the Partnership to use The Loan Company name and logo in San Diego County.

The Partnership books were converted from a cash basis to an accrual method of accounting.

The Partnership accumulated cash. To attract qualified borrowers, the GP reduced the interest rate charged and extended the typical loan term from three to five years. To protect the Partnership against interest rate fluctuation, the GP began underwriting adjustable rate mortgages and amortized loans for a major part of the loan portfolio.

Ed Mateer became the Chief Underwriter, bringing twenty-five years of real estate lending, brokering, and appraising acumen to upper management.

The Partnership undertook an offering to raise capital to $10,000,000. This goal was reached during the first quarter of 2000.

Key-man insurance in the amount of $500,000 was put in place in the event of Steven B. Dillaway’s death.

A Reserve for Doubtful Accounts was established.

In August, with the assistance of the Limited Partners Committee, the Partnership Agreement was amended and restated in its entirety.

In September, the Limited Partners approved the amended and restated Partnership. The name of the Partnership was changed to The Loan Company of San Diego, a California Limited Partnership.

Also, the GP’s interest in the Partnership was restructured. The GP’s share of net profits remained the same, but was divided between Steven B. Dillaway, an individual, and The Loan Company, a California Corporation. Simultaneously, Ed Mateer acquired a 20% equity interest in the corporate GP. The establishment of the corporate GP eliminated the need to dissolve the Partnership or find a new GP in the event of the death, disability, or retirement of Steven B. Dillaway.

Pursuant to the restructuring approved in September 2000, Steven B. Dillaway transferred one-half of his GP interest to the Corporation. In February, the Partnership began an offering with the intention of raising capital to $20,000,000. This goal was reached in September 2003.

Since the year ending December 31, 2002, The Loan Company of San Diego’s financial statements have been audited and an Independent Auditors’ Report has been issued.

The Partnership began an offering with the intention of raising capital to $40,000,000.

In August, the above offering was ended with capital standing at $36,233,212. Security law mandates a six-month Quiet Period before undertaking a new offering (August 1, 2005 through February 2, 2006). During this time, no investment monies could be accepted and no Limited Partners could be added to the Partnership.

During the Quiet Period, several amendments to the Partnership Agreement were proposed: 1) to increase the size of the Limited Partners Committee; 2) to make provisions for Steven B. Dillaway’s GP interest to be converted to a Preferred Limited Partner interest upon his dissociation (death, retirement, or incapacity); and 3) to enhance the Limited Partners’ ability to withdraw capital.

In May, the name of the corporate General Partner was changed from The Loan Company, a California Corporation to Corporate GP, a California Corporation.

In December, the Partnership’s lines of credit were increased to $12,000,000.

In February, the Partnership began an offering with the intention of raising capital to $100 million over the next four to five years. This was a private offering open only to individuals who satisfy stringent suitability requirements.

In April, the Partnership Agreement was amended to provide that in the event of Steve Dillaway’s death, disability or retirement, his GP interest would be converted to a Preferred Limited Partner interest.  The Limited Partners Committee was expanded to not less than three or more than seven members. And the Limited Partners’ ability to withdraw capital was enhanced.

In July, Laurie Dunlop, the Partnership’s longtime CPA and Chief Financial Officer, received an option for 4% equity interest in Corporate GP.

Partnership capital grew 13.6% to $41,646,930 and yielded 8.75%.

John Lloyd joined Ed Mateer in the underwriting of loans. Darcy Peters joined loan processing and loan origination. Elizebeth Poe, CPA, joined accounting to assist Laurie Dunlop, CFO. John Lloyd and Laurie Dunlop were granted options to acquire stock in Corporate GP. The Partnership increased its line of credit to $15,000,000.

June 2007 was marked the official beginning of the Recession by the National Bureau of Economic Research, the official marker of U.S. economic cycles.

Though the residential real estate market began to decline, Partnership capital grew 9.23% to $45,492,136 and yielded 9.39%.

John Lloyd became President of the Partnership. Geno Altiery joined loan servicing.

The residential real estate market imploded. JP Morgan Chase acquired Bears Stearns at a fire sale in March. Lehman Brothers filed bankruptcy in September. President George W. Bush signed the Trouble Asset Relief Program (TARP) in October.

Partnership capital grew 12.86% to $51,342,513 and yielded 8.1%, a testimony to the mission statement, business plan and management.

In January, Ed Mateer retired from The Loan Company of San Diego.

In February, President Barack Obama signed the American Recovery and Reinvestment Act of 2009 (also known as The Stimulus Bill or The Recovery Act).

In July, the Partnership’s bank was seized by the FDIC and the Partnership was advised its line of credit would not be renewed. The General Partner froze capital (not income) withdrawals for the quarter ending March 31 and placed a 6% withdrawal fee on capital (not income) withdrawals for the quarters ending June 30, September 30, and December 31. All Partners seeking to withdraw capital were satisfied.

The Partnership began a new offering in July 2009 with the intention of raising capital to $100,000,000.

December 2009 was marked the official end of the Recession by the National Bureau of Economic Research, the official marker of U.S. economic cycles.

Though the effects of the recession continued, the Partnership’s capital remained virtually unchanged at $51,330,294 and yielded 6.57%, a continuing testimony to the mission statement, business plan and management.

The General Partner left the 6% withdrawal fee in place for capital requests.

In March, the Partnership adopted a generic Notice of Right of First Refusal to facilitate capital account transfers between Partners and third parties in the event the Partnership is unable to satisfy a Partner’s request to withdraw capital. Also, Regents Bank provided a $5,000,000 line of credit to the Partnership.

The Partnership’s capital increased to $53,984,445 and yielded 6.44%, a continuing testimony to the mission statement, business plan and management.

The General Partner removed the 6% withdrawal fee beginning the first quarter of 2011.

Loan Broker Services — the entity which prepared loan documents on behalf of the Partnership and was owned by the General Partner — was transferred to the Partnership at January 1, 2011 to be operated as a separate department.

Effective January 1, 2011, to enhance transparency, commission points paid by borrowers began being held in escrow until reviewed by the Limited Partners Committee. Further, commission income paid to the General Partners was capped, which directly benefits the Partnership in the form of underwriting point income.

Key-man life insurance was acquired on John Lloyd, President, and Laurie Dunlop, CFO.

Vibra Bank provided a second line of credit facility in the amount of $2,500,000.

The hangover of the Great Recession persisted, yet the Partnership’s capital increased to $54,841,766 and yielded 7.13%, a continuing testimony to the mission statement, business plan and management.

John Lloyd, President, and Laurie Dunlop, CFO, exercised stock options and became shareholders in Corporate GP, adding stability and continuity to the Partnership succession plan.

Regents Bank doubled the Partnership credit facility to $10,000,000.

The Great Recession’s effect persisted in the economy, yet the Partnership’s capital increased by 13.08% to $62,014,565 and yielded 7.94%, a continuing testimony to the mission statement, business plan and management.

A succession plan had been in place for several years and the management team was in place and ready to assume Steven B. Dillaway’s withdrawal from day-to-day operations. Partnership capital grew 18.8% to $73,673,172 and yielded 8.04%.

Effective January 1, 2014, Steven B. Dillaway retired from operations, but continued as individual General Partner and President of Corporate GP. Steve’s share of commission income passed to the Partnership, which directly benefits the Partnership in the form of underwriting point income.

The offering begun in July 2009 was closed effective August 31, 2014. A six-month Quiet Period began October 1, 2014.

In June, The Loan Company expanded into contiguous space and refreshed its offices. In September, Teri King, with 30 years of banking experience, joined The Loan Company of San Diego as Office Administrator and assistant in every phase of operations. Partnership capital grew 15% to $84,772,034 and yielded 8.10%.

Effective January 1, 2015, JES Commissions was fully integrated into the Partnership as a separate department. To eliminate conflicts and enhance accountability, all Partnership underwriters will be compensated by salary, a portion of which may be based on department earnings.

In April, ending a six-month Quiet Period, the Partnership began an offering with the intention of raising capital to $150,000,000 over the next four to five years.

Ivan Lavinsky, a California attorney, a Limited Partner, and a Limited Partners Committee member, agreed to serve as corporate counsel to Corporate GP.

Partnership capital grew 15% to $97,420,185 and yielded 7.95%.

Effective January 1, 2016, Corporate GP changed officers: Steve Dillaway stepped down as President, John Lloyd replaced Steve as President, and Ivan Lavinsky replaced John as Vice President. Laurie Dunlop continued as Secretary of Corporate GP; Steve, John, and Laurie continued as Directors.

The Loan Company annexed an adjacent suite of offices to accommodate its expanding number of employees and anticipation of growth.

Effective January 1, 2017, long-time employee and first Chief Financial Officer, Laurie Dunlop, announced she would leave The Loan Company of San Diego to pursue her own business venture. Simultaneously, Corporate GP purchased Laurie’s shares (5%), resulting in 55% Steve Dillaway, 32% John Lloyd, and 13% Ed Mateer. Laurie continued into 2018, transferring her responsibilities to others.

After reviewing and considering off-the-shelf software upgrade options, the General Partner recognized that proprietary software would be in the Partnership’s best interests. The development of proprietary loan origination and servicing software referred to as OM began in April. This undertaking came with the understanding that OM would be a years-long developmental process.

In December, the Partnership received its long-anticipated California Financing Lenders (CFL) License. Previously, the Partnership operated exclusively under the Bureau of Real Estate (BRE), formerly the Department of Real Estate. Going forward the Partnership will have additional options.

At year-end, the Partnership had twelve employees. Partnership capital grew 18% to $141,763,442 and yielded 8.02%.

In January, Phase 1 of OM — loan origination — was placed in service.

In May, the current offering was closed and a six-month Quiet Period commenced (May 30, 2018 through November 30, 2018). In accordance with security law, no investment monies could be accepted and no Limited Partners could be added to the Partnership.

On December 1, with Partnership capital at approximately $158,000,000, the Partnership began an offering with the intention of raising capital to $250,000,000 over the next four to five years.

Partnership capital grew 13% to $159,702,527 and yielded 8.26%.

Effective March 5, 2019, John Lloyd’s and Darcy Peters’ employment ended. Ivan Lavinsky was hired as President of The Loan Company of San Diego.

In April, Angela Kasten was promoted to Chief Financial Officer and Elizebeth Poe was promoted to Controller.

A review and tightening of our underwriting was undertaken, as well as a rebalancing of our portfolio, with less emphasis on bridge loans and more emphasis on mini-perm loans with 5-10 year terms with variable rates and amortization.

In October, we suspended accepting new Partners. We also ceased our proprietary software project and wrote-off the previously capitalized development cost. Partnership capital grew 13% to $180,960,685 and yielded 7.35%.

As a precaution to COVID-19, all employees were placed on work-at-home status on March 18 until further determination. On March 19, 2020 California Governor Gavin Newsom announced a statewide shelter-in-place order.

Due to the uncertainties caused by COVID-19, the General Partner exercised his broad discretion and froze capital contributions and capital withdrawals (income withdrawals were not affected). In addition, a temporary Borrower Relief Program for borrowers who had been directly affected by the COVID-19 virus was put in place.

A capital withdrawal fee of 12% was in place for the quarters ending July 31, 2020 and September 30, 2020. For the quarter ending December 31, 2020, the capital withdrawal fee was reduced to 6%. No restrictions were placed on income withdrawals.

Partnership capital grew to $186,424,006 and yielded 6.35%.

For the quarters ending March 31, 2021 and June 30, 2021, $4,000,000 was made available for capital withdrawals with a ZERO fee. For amounts over $4,000,000, there was a 6% fee. Capital withdrawals returned to normal for the quarter ending September 30, 2021.

In April 2021, CFO Angela Kasten and her husband embarked on a new phase of their life. Yolanda McCollum was hired in Angela’s place as CFO.

Although traditional bank interest rates continued to drop to new lows, The Loan Company of San Diego originated $75,863,147 in new loans. Ending capital in 2021 was $185,347,843 and yielded 7.37%.

The Partnership replaced the 11th District Cost of Funds Index (COFI) for its adjustable-rate loans with a proprietary index based on the 10-Year Treasury Rate.

Partnership capital grew to $190,818,144 and yielded 6.79%.

The federal COVID-19 PHE declaration ended on May 11, 2023. Neither The Loan Company of San Diego, nor its General Partner, nor any affiliate applied for or received any Federal or State assistance for COVID-19. All employees except one received pre-COVID compensation while sheltered in place at home.

Founder Steven B. Dillaway retired as an individual General Partner effective November 15, 2023. The sole General Partner of the Partnership is Corporate GP, a California Corporation.

Partnership capital grew to $196,543,772 and yielded 8.10%.

Effective January 2024, Ivan Lavinsky’s employment ended. Michelle McGuire Richardson was hired as President of The Loan Company of San Diego, and was nominated CEO of Corporate GP. Michelle brings 30+ years of banking, lending, operations, and leadership experience to The Loan Company of San Diego. As a risk professional, she understands that risk is a necessary part of any success story. The Loan Company of San Diego continues to stay the course to ensure company, borrower and Partner success.

In February 2024, Chris Richardson was promoted to Chief Technology Officer. He has been an integral part of the Partnership’s development processes since 2007, including in-network security, new production software, and information infrastructure. He is an expert in his field with over 25 years’ experience. His certifications include CCNA, CCNE, and MSCE.

Effective May 2024, Laurie Dunlop returned to The Loan Company of San Diego to replace Yolanda McCollum as CFO. Cumulatively, she has over 30 years’ experience in auditing, finance, accounting, and real estate. She is a CPA, holds a California Real Estate Broker’s license, and owned a CPA firm in Arizona with a concentrated real estate clientele. She has been a Limited Partner since 2018.

The Loan Company of San Diego’s Licensing Agreement has been extended through December 31, 2030.