RPC launches loan readiness training course

The Pre-Loan Readiness and Incubator pilot is helping participants get their financial ducks in a row.
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John Hendershot Courtesy Rende Progress Capital

Rende Progress Capital has launched another component of its mission to help excluded entrepreneurs of color get the financing they need for their businesses.

Grand Rapids-based racial equity lending firm RPC on June 24 launched a nine-week pilot course dubbed the Pre-Loan Readiness and Incubator Program with support from Fifth Third Bank and the U.S. Treasury Community Development Financial Institution Fund.

John Hendershot, business development director for RPC, helped the firm build and structure the program and is teaching the courses.

“We’re going to be focusing on a lot of things that other nonprofit organizations don’t necessarily hit on, which are just as important as the marketing and pitching,” Hendershot said. “We’re more focused on the financial aspect, making sure that a business sets up a firm foundation, making sure that they have the correct licenses, know how to read P&Ls, use accounting software, those types of things, because we believe that those are the necessary tenets to have a strong loan application and a strong business.”

Eric Foster Courtesy Rende Progress Capital

Thirteen business owners of color who have not been able to secure loans from traditional lenders will participate in the inaugural cohort, which had an enrollment fee of $50. If participants complete the full program, they will receive a financial award of $1,000 each.

According to Eric Foster, RPC co-founder, chair and managing director, the program is for:

  1. Introducing excluded entrepreneurs of color to RPC.
  2. Teaching them techniques for loan preparedness.
  3. Providing counseling in financial principles within the RPC loan application process.
  4. Completing simulated business planning and mock loan applications for review and feedback to prepare participants for the RPC lending application process in future.

RPC’s goal since its founding in 2018 has been to respond with innovation to lending barriers that excluded entrepreneurs of color face, both capital and noncapital, Foster said. The Pre-Loan Readiness and Incubator Program was developed to:

  • Provide a deep, interactive and resource-awarding program to provide excluded entrepreneurs of color with additional knowledge beyond the standard technical assistance RPC offers.
  • Address the opportunity and information barriers that excluded entrepreneurs face in loan application procedures due to not having opportunities to apply for conventional loans or engagement with lenders. (Nearly 90% of RPC loans customers have never before received a small business loan.)

Foster said the loan readiness program was envisioned four or five years ago during his research phase before starting the firm, when he listened to focus groups and individual excluded entrepreneurs of color as they shared “their narratives and frustrations with the bias and market barriers to accessing conventional loans.”

“This aspect of what we are doing comes directly from the experiences that they shared,” Foster said. “… At that time, I homed in on the fact that the reality of loan denial rates for businesses of color being three times higher, 42%, compared to their white peers at 16%, according to the U.S. Department of Commerce Minority Business Development Agency, was not just based on explicit bias, but that a business of color, like any business, cannot be fully prepared for loan readiness if they didn’t even have the opportunity and the chance to go through basic steps and information that one would find out about no matter if they received the loan or not.

“And so that’s where we are recognizing that there’s an information gap — businesses of color are equipped and bring intelligence to their product, good or services. They are not unaware about loan details because of pathology, but rather, some of them don’t know the full picture because of not having a simple opportunity to apply for a loan, which then creates information barriers just as (it does) capital barriers. It’s our job to eliminate both, and it’s a pleasure to do this, which is emblematic of just one more thing that we offer that has originated from the direct, authentic engagement in the struggles (and) frustrations of the excluded entrepreneurs of color.”

Hendershot said he is grateful he gets to be part of the process.

“I am just grateful that Eric had the vision and that I get to be one of the individuals who gets to help with that vision,” he said.

Foster said the goal is to run the pilot and assess outcomes at the end, and hopefully convert it into an ongoing offering.

The first 13 participants are as follows:

  • Dr. Lisa Marie Barnes, Believers Home Care LLC — African American female business owner
  • Krishna B. Bista, Krishna B. Bista Interpreter — Asian American male business owner
  • Sarah Brandt, Auntie’s House — Native American female organizational participant
  • Arick Davis, Last Mile Café — African American male business owner
  • Emmanuel Esparza, E&E Lawn & Snow Services — Hispanic male business owner
  • Salia Georgete, West Michigan Home Care — Asian American female organizational participant
  • Tiffany Gray, Taxes by Tiffany — African American female business owner
  • Edgar Guerrero, Casa Pintura — Hispanic male business partner/employee
  • Ange Kramo, Shiloh Assets Management — African American male business owner
  • Pavel C. Mendez-Jimenez, Mendez Carpeting — Hispanic male business owner
  • Jodie Rykse Salmoran, Casa Pintura — Hispanic female business partner/employee
  • Juan Salmoran, Casa Pintura — Hispanic male business partner
  • Christopher Simmons, StudioHenre LLC — African American male business owner

RPC engaged the Hispanic Center of Western Michigan to provide Spanish language interpreters for the course.

Foster said after the first week of the program, the participants were so excited about what they learned and the potential opportunities the course would unlock that they surrounded Hendershot in the parking lot outside RPC’s office to ask more questions and offer feedback.

“When you talk about eliminating the racial wealth gap, it is both challenging and exciting when you have us team members who, before you get into the quantitative of how we are doing in eliminating the racial wealth gap through lending, (we have) people who are just so excited that the social capital as John says, or the information gap, in terms of racial equity, is closing, and how basically the entrepreneurs of color and people like John are so excited by the opportunity that they were never presented with before. That’s what touched me,” Foster said.

Davis, owner of Last Mile Café, a startup coffee business “setting out to revolutionize what people expect,” said he is thankful for the opportunity to join the Pre-Loan Readiness program.

“I have been in the RPC ecosystem since I moved back to Grand Rapids and was waiting for an opportunity that made sense to pursue capital through the fund,” he said. “With Last Mile, we intend to open a coffee shop/retail place early next year and also plan to expand our offerings to customers and retail partners.

“RPC loan incubator program was a clear step to help us prepare for the loan process and ensure that we have our ducks in a row. As a new entrepreneur, there is so much to learn, and it is easy to find pieces of information here and there. John and the team have done an exceptional job delivering other informational series, and I expect this program to be even better. So far it is. At the end of the program, Last Mile Cafe will be ready to seek funding to take our business to the next level.”

Those who might be interested in participating in a potential second cohort after the program’s pilot phase can contact Hendershot at jhender@rendeprogresscapital.com or Foster at ekfoster@rendeprogresscapital.com.

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