Serial Start-up Entrepreneur Finds Niche in the Credit Repair Industry

Holt Hackney

Peter J. Burns III thinks of new business ideas like other people think about their next meal. The ideas are that frequent. The challenge for Burns has always been sifting through the many ideas and building out the good ones. There are only so many hours in the day, even for Burns, who rarely sleeps. Burns, who by his own count has started, run, sold and/or expanded between 100-150 individual businesses in dozens of fields, believes he recently found a good one by connecting the dots in a very fragmented industry. The company, Burns Funding, is near and dear to Burns’ heart. “As any serial entrepreneur will tell you, not every business is a home run,” said Burns. “Some fail through no fault of the entrepreneur, leaving the small business owners in debt, and their credit score plummeting.

“The same is true of regular people, who suffer a run of bad luck, or perhaps were overly optimistic about their financial future. Again, I’ve been there.” What Burns has done is as follows: Let’s say John Doe has $50,000 in high interest credit card debt and credit score around 600. Doe is struggling to make ends meet because of the monthly payments. Doe goes to a credit repair service and asks for their help. Some credit repair services will clean up some of the incorrect reporting and resolve other issues. Others will do that, and they have an individual at their disposal, who is willing to loan money to the applicant, a bridge loan, so he can pay down debt. This would reduce Doe’s all-important Credit Utilization Ratio (CUR), which is a key measuring stick for a credit score, down to 45 percent. This will provide a sufficient bump in the credit score for Doe to obtain low interest debt and pay off the credit card debt, thus reducing the monthly payment associated with credit card interest.

Where Burns has come in is by connecting with multiple financial institutions that are willing to make a bridge loan at a lower interest rate than the individuals. In addition, he has hammered out an agreement with the institutions, where they will go far below the 45 percent CUR to 30 percent or lower. This means Doe is able to pay off more of the high-interest debt, further increasing his credit score and qualifying him for a greater amount of low-interest money. Thus, Doe ends up paying less each month in interest.

Why hasn’t anyone else in the industry done this?

“The main reason is the industry is highly fragmented,” said Darrell Hornbacher, President of Midas-Financial, which is the largest credit repair company in Arizona and has 35,000 credit score restorations to its credit. “This industry has been growing so fast that we all have our hands full servicing new customers. No one is incentivized to move up or down the food chain and create a dynamic marketplace. What Peter Burns is doing, in many ways, is the missing link, creating winners out of everyone in the process. Peter certainly wins, the financial institutions win, and we win. Most importantly, the customer wins because they are paying substantially less in interest each month.”

Burns, for his part, does not fancy himself as a White Knight. Rather he is a capitalist, whose experience as a serial entrepreneur has helped him spot opportunities. “Since founding my first company as a teenager, I have found that my expertise lies primarily in the establishing and growing of niche market businesses in fragmented industries … of any kind,” said Burns. “Fortunately, I have a particularly good skill set of recognizing opportunities early on in the process and being able to fund almost any enterprise with creative financing techniques I’ve learned over my career. “This is the first company to offer a vertical integration approach of repairing credit and providing fresh new debt capital at rates and terms that benefit everyone involved,” he said.
Hornbacher is a believer.

“Peter has disrupted our industry in a matter of weeks, just as the companies that offered credit card stacking did several years ago,” he said. Burns is philosophical about his company’s ability to dominate market place. “Look, 100 companies like me could come into the space tomorrow and do the same thing,” he said. “But there’s enough capital floating around that each of those companies can be successful. There’s that much inefficiency in the marketplace.”