Jerry Donnan, founder of Factual Data Corp., now Kroll Factual Data Inc., saw a need for improved service in the mortgage credit check business. Kroll Factual Data now holds about 30 percent of the market in the United Statees.

Donnan lifted Factual Data from startup to industry star 2005 Bravo! Entrepreneur — Loveland

LOVELAND – When Jerry Donnan launched Factual Data Corp. in 1985, he promised potential clients that he could process mortgage credit checks faster and more accurately than anybody else in town.

The trouble was, he still had to figure out how.

“When we first made sales calls, we had to say, ‘We want your business, but we’ve never done this before,'” Donnan recalled of his first days.

Donnan found that mortgage lenders were so hungry for an alternative to existing credit bureaus, they were willing to take a chance on the new kid.

It also helped that Donnan’s first full-time employee was a former president of the Fort Collins Board of Realtors who had ready connections with local mortgage lenders.

The employee “brought back 30 applications in one day,” Donnan recalled. That’s because he walked through a lender’s office and literally grabbed the applications off the desk.

True story.

Twenty years later, the company Donnan reared along with his wife, Marcia, is now Kroll Factual Data Inc., a division of Kroll Inc. The company has 20,000 clients nationwide, bills $120 million in business a year, and commands almost 30 percent of the mortgage credit market across the country.

Donnan now serves as an executive consultant with Kroll Factual Data, while his son James is president. Another son, Russ, manages information technology for the company, which is known as a technology trendsetter in the industry.

Despite the war stories from Factual Data’s start-up period, Jerry Donnan wasn’t entering the business with blinders on.

He had already risen to a regional management position for mortgage lender Avco Financial Services, supervising 60 offices in 20 states. Marcia’s father owned a credit-reporting firm in Iowa and Marcia helped to manage that business.

The experience helped the Donnans realize there was a service gap in the mortgage credit sector.

“The only people doing it were local credit bureaus,” Donnan said. “And they could charge what they wanted to.”

Donnan figured right. In the first year in business, which started in 1985, Factual Data captured 80 percent of the local market.

Still, Factual Data had overcome hurdles, said James Donnan.

“Starting out in the business we’re in, there’s considerable push back from vendors as well as the competition,” the younger Donnan recalled. “His persistence in getting our foot on the map was critical … He’s was always finding ways to win, even when times were, let’s say, difficult.”

At the beginning, mortgage credit checks took three days per application. At full throttle, Factual Data could finish eight reports a day at $65 each. Labor represented 65 percent of the company’s costs.

But Donnan’s commitment to technology, which eventually included proprietary software to hasten credit checks, helped to turn the credit-check process into a matter of key strokes.

“Today we can return a report in about a second and a half,” he said.

In addition to technology, Donnan recognized early that he needed to add bulk to the company in order to win over larger mortgage lenders as clients.

In 1991 he franchised the Factual Data name. Next, in 1998, he took the company public. That same year he relocated the business to the Centerra development in Loveland, where the company now operates a three-building campus with 300 employees.

Even though the company was experiencing steady growth in the ’90s, Donnan also saw the need to diversify, and brought employment background checks and residential tenant screening into Factual Data’s mix of services.

Now, non-mortgage services represent 40 percent of the company sales.

Predictably, Factual Data’s record of sales growth and industry-leading technology attracted corporate suitors. Early in 2002 Fidelity National Information Solutions Inc. agreed to buy Factual Data for $84 million, but by August of that year the deal dissolved.

In June 2003 Kroll Inc. swooped in with a $115 million offer and the deal closed later that year.

Before the end of the year, Donnan retired from Factual Data, but not from the business world. He’s converted some of his proceeds from the sale into the Donnan Charitable Foundation Inc., which he runs with Marcia. The foundation targets needs of disadvantaged children. He’s also established Donnan Ltd., a vehicle for investing in start-up companies in the region.

Still, he keeps a fond eye cast on the fortunes of Kroll Factual Data, which he thinks will continue to prosper.

Ongoing demand for real estate services, as well as employment background checks, makes Donnan believe the company could “double in size” by the end of the decade.

As a company consultant, Donnan checks in with Factual Data periodically. And according to the new boss, the old boss remains a welcome site.

“Ever since his retirement,” James said, “there’s a smile on everyone’s face when Jerry decides to stop by.”