GRAND RAPIDS — When Reliable Medical Transport LLC realized it needed to add vehicles to its fleet to grow the business, founder Rich Flowers ran into some roadblocks familiar to many African American and minority entrepreneurs.
Despite a three-year history, the non-emergency medical transportation company that provides rides to patients undergoing dialysis and various rehabilitation therapies ran into issues accessing capital to support its growth.
For Flowers, it appeared that his bad credit history would prove to be the “Achilles heel” to his company’s ability to secure the funding it needed.
“I knew I had some sins to deal with, just bad decisions in the past that affected my credit,” Flowers said.
The company found some needed help when Grand Rapids Area Black Businesses (GRABB), a business incubator program for African American entrepreneurs, introduced Flowers to executives at Northern Initiatives.
The Marquette-based community development financial institution works to provide credit to small business owners who may not yet qualify for a traditional bank business loan because they lack a track record, adequate collateral or cash flow.
As this report went to press, Reliable Medical Transport was in the process of closing on a $250,000 loan from Northern Initiatives. Flowers said he hopes to use the likely capital infusion to immediately add two new vehicles, which will allow the company to begin exploring contracts with larger health care providers.
Flowers said that he explored traditional bank debt but couldn’t get approved. Northern Initiatives offered “less red tape to go through than dealing with a traditional bank.”
In recent years, Northern Initiatives has expanded its presence in Michigan, most recently by moving into the Grand Rapids, Muskegon and Battle Creek markets.
“Grand Rapids is a growing place and it offers us a lot more opportunity to support diversity than we’re going to have in Northern Michigan,” said Dennis West, president of Northern Initiatives. “We recognize from relationships with local community foundations and such over the years, particularly in Western Michigan, that there has been interest in our ability to offer the kinds of things that we do.”
In Grand Rapids, Northern Initiatives’ work is backed by $316,000 from Wells Fargo Bank to support technical assistance that complements loans, such as mentoring and business coaching for borrowers.
“It’s not just that capital. Small businesses, particularly startups, need know-how,” West said.
Beyond the challenges of securing traditional bank financing, Flowers at Reliable Medical Transport said he’s also struggled to fit into the local entrepreneurial ecosystem, a sentiment echoed by other African American and minority business owners in Grand Rapids.
“It’s a challenge,” said Flowers, who recounted a story about walking into a meeting with a potential business contact and observing the receptionist immediately clutching her purse.
“Trying to get in and get to the main person that could either cause your business to go forward or cause your business to go down is a challenge,” Flowers said. “But you don’t give up. You continue to go every day and provide a good service and your name eventually gets out there, people get to know you. But it is challenging being an African American business owner here in West Michigan.”
Bolstering minority entrepreneurship and broadening access to economic opportunities became a priority in recent years for many of Grand Rapids’ business and political leaders, particularly after a 2015 Forbes report called the city one of the worst in the country for African Americans.
Entrepreneurial support organizations such as Start Garden LLC have launched a number of initiatives to help new startup business ventures from the African American and Latino communities, as MiBiz previously reported.
GRABB founder Jamiel Robinson said the efforts are aimed at “trying to remove as many barriers and obstacles that slow down (minority entrepreneurs’) ability to grow and scale as quickly as possible.”
Jonathan Jelks, a black entrepreneur in Grand Rapids and a co-founder of the tech incubator Midwest Tech Project, notes that minority business owners often get turned off by many of the networking and professional events in the region.
“It’s homogeneous and it’s incestuous,” Jelks said of the region’s business community. “So what we’ve been able to do is put together a strong community of trusted partners who understand where our businesses are at. They have intentionality about wanting to see more diverse businesses flourish in the area and where we can connect the dots.”
To that end, Jelks says that while conversations continue to focus on ensuring access for minority entrepreneurs, examples like Reliable Medical Transport’s pending deal with Northern Initiatives are proof that those discussions are bearing fruit.
“Everyone is looking for something like this, and it’s happening,” Jelks said. “This is it. This is what it looks like.”
MiBiz Senior Writer Mark Sanchez contributed to this report.