RAPAPORT… A new fund for diamond companies is set to launch, aiming to provide an easier way for firms to obtain credit.
“The diamond industry is in a major state of flux, with all the major commercial banks exiting the space,” Chris Del Gatto (pictured), creator of the Delgatto Diamond Fund, told Rapaport News. “There is an unprecedented shortage of working capital among dealers, wholesalers, and cutters.”
The venture seeks to address that need for funds in a way that is both sustainable and affordable, explained Del Gatto, who is also the CEO of “I Do Now I Don’t,” a consumer-focused diamond-and-jewelry sales platform.
Getting funding will be much easier than the current process companies must go through to obtain a bank
loan, according to Del Gatto. The lender will not necessarily review a
company’s profit-and-loss statement the way a financial institution would, but
instead will judge a potential borrower based on other factors, such as
references.
In addition, borrowers will obtain loans using their diamonds
as collateral. While the fund will hold the stones, clients will have
full access to them at any time, with a few hours’ notice. Del Gatto’s service
will also include the use of his online sales platform — the largest of its
kind, he said — enabling clients to market those diamonds to
consumers around the world. Using the platform will provide dealers with access
not only to capital, but also to consumers, rather than just retail jewelers,
which, he stated, will help them increase their profit margin.
“This is an unprecedented
initiative in our industry, and we expect that demand will be so great that we
can quickly become the largest nontraditional diamond financier globally,” Del
Gatto added.
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