Excelsior Capital Ventures, a specialty finance company, launched to provide funding for the mid-stream diamond and jewelry industry.

The New York-based firm, founded by industry leader Nehal Modi, expects to begin lending operations on October 3, 2016, and will provide loans secured by diamond and precious metal inventories.

“We are in an environment where the diamond and jewelry industry is experiencing a significant contraction in lending,” Modi said. “There is a dire need for new capital and greater liquidity in order to expand the companies and industry at large.”

Modi estimates there is a $6 billion shortfall in market liquidity in the jewelry industry and Excelsior intends to close the gap by at least $1.5 billion in total loans by 2019.

ECV’s business model encompasses secure asset management, risk-mitigated logistics, spot market appraisals, asset monetization and assisted marketing solutions for customers’ inventory. A key development since ECV began establishing its infrastructure and operations in 2015 is its ability to fund select consignment programs at approved major retailers.

Excelsior, which will be providing loans of up to $20 million per borrower, is working with industry stakeholders to implement its solution to the liquidity crisis. Jon Mitchell, ECV’s CFO, said that the firm is in discussions with all the major diamond banks.

“We are working diligently to determine how we can co-lend with them on a client-by-client basis,” Mitchel said. “We are also meeting with prospective borrowers daily to better understand their capital needs and to ensure that we are fully equipped to service them. Either way, we are demonstrating our long-term commitment to the industry by pledging a large pool of capital.”

Excelsior has engaged White Pine Trading as its infrastructure, logistics and distribution services partner for ECV borrowers.