Racial equity lender participates in first loan

Richard Flowers, owner of Reliable Medical Transport, plans to expand his vehicle fleet and staff, and build a second transportation business in 2019, thanks to financing from a pair of alternative lenders.

Grand Rapids-based Rende Progress Capital (RPC) in the fourth quarter of 2018 partnered with Northern Initiatives — which is a Marquette-based community development financial institution (CDFI) with a presence in Grand Rapids, Muskegon and Battle Creek — to lend $250,000 to Flowers.

Flowers started his Grand Rapids company — which provides door-to-door nonemergency medical transportation for disabled, elderly, wheelchair-bound and insured clients — three years ago with no capital of his own. He borrowed $17,000 for startup costs from various people in his network and secured a co-signer for the loans on his first two vehicles.

Within the first year and a half, Flowers said he paid back the startup costs to his friends.

He took out additional loans to add more vehicles to his fleet, but because of his poor credit score, they came with unfavorably high interest rates. Through Grand Rapids Area Black Businesses (GRABB), Flowers this year connected with Northern Initiatives to begin the process of securing financing for the $250,000 loan.

As a CDFI, Northern Initiatives focuses on lending to underserved applicants who don’t qualify for financing elsewhere.

RPC, a racial equity lending firm launched in March 2018 by Eric Foster and Cuong Huynh, also is working toward CDFI certification. This was its inaugural loan.

The $250,000 sum allowed Flowers to consolidate his vehicle loans with a lower interest rate, which will free up capital for him to pursue his goals of hiring two to three more employees for Reliable Medical Transport — up from the eight he has now — plus adding vehicles to his current fleet of seven.

He also plans to start another business in the transportation industry by the end of January or beginning of February.

“It will be called R3 Logistics,” Flowers said. “We will be transporting dry goods, mechanical, whatever is out there. … We’re looking to become a broker.”

Flowers said the RPC/Northern Initiatives loan means several things to him: expansion, new possibilities for him and opportunities for the clients he serves to have a better quality of life.

“If you’ve got capital, you can do some things,” he said. “With a lack of that, you become dormant.”

Foster, RPC’s chair and managing director, said he and the RPC loan committee appreciated Reliable Medical Transport’s business model, perseverance, growth and meeting RPC’s lending and racial equity criteria — all determining factors in the firm’s decision to lend.

“We are very excited; this is a wonderful opportunity,” Foster said. “It’s what we were created for. … I’m excited for that and for the unique business model of this company. While we were the participant with another entity (Northern Initiatives), we were able to view criteria and apply our unique racial equity assessment. The owner is excited, and we look forward to continuing to have these milestones.”

Foster said he was impressed by Flowers’ accomplishments after starting from scratch and his resourcefulness in networking with GRABB and others.

“I look at the things we saw in his business, and I think, ‘How could he have done that?’” Foster said. “I know there will be others we will look at and say, ‘How did they persevere through market circumstances without capital?’ I appreciate his dedication.”

Flowers said he had to exercise a lot of patience as the business grew.

“When you don’t have the capital to get the right products and meet the demand, you could literally crush yourself,” he said. “There were so many times I had to stop going out there and doing sales because we could have gotten overwhelmed really fast.

“This loan (allows us) the opportunity to grow more and create more opportunity.”

Foster said his firm is working on hiring a loan officer before it issues its next loan, but the firm will consider the other applicants still in its database in 2019.

RPC is open to financing a wide range of industries, he said, including professional services, health and technology, to name a few.

“We don’t predisposition ourselves,” Foster said. “It’s their business impact, ability to expand and be profitable and fulfill some of our racial equity criteria.”

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