By Kayla Sosa
A community organization in Grand Rapids is making it easier for entrepreneurs and small business owners who can’t obtain a bank loan through racial bias and inequity, to acquire funds.
Rende Progress Capital was co-founded by Eric Foster, business owner, and Cuong Q. Huynh, non-profit founder.
The organization is founded on the work and financial support of Foster’s project as a W.K. Kellogg Foundation fellow. In that program, Foster was among 120 leaders – across all sectors – all over the country, who worked to research and develop a project that meets the Kellogg priorities; healthy kids, educated kids and economically secure families.
“My prescription, what I wanted to do to strengthen economic security for children and families was to do two years of research developing solutions to provide capital and entrepreneur resources,” Foster said.
Foster held focus groups around the state with entrepreneurs of color to understand all the barriers “for them, their families and their communities.”
“The answer… was alternative capital and services that would help eliminate the racial wealth gap,” Foster said.
After completing the fellowship and building up the foundation for a new community organization, Foster and Huynh formally opened RPC in 2018.
“RPC is the newest, and only in the nation, racial equity-focused loan fund; providing small business loans to – what we term – excluded entrepreneurs; African-American, Latino, Native American, Asian, Immigrant, who not because of their race but because of the statistical, documented barriers that they face to conventional lending, and racial bias in lending from some conventional lenders.”
Loans are offered to emerging and existing businesses in the West Michigan community. The first loan recipient was Richard Flowers, owner of Reliable Medical Transport. One of the most recent loan recipients was Clara Guevara, owner of Maily’s Dominican Salon.
On top of providing access to loans and investments for entrepreneurs, RPC also offers other business-building services. For a free or reduced fee, entrepreneurs can access technical business services, such as information and training sessions on accounting principles, budgeting and business plans.
Through his statewide focus groups, Foster learned that 42 percent of the entrepreneurs of color made harmful decisions for their business, because they felt they will be denied a loan because of race, because of seeing other instances in the news or someone they know.
“They do certain alternatives such as overcapitalizing their business with their own money at almost 36 percent more than their white peers,” Foster explained. “Or, 12 percent in some focus group has considered payday lending with astronomical rates that never really get them out of the trouble they’ve gotten in for getting very high, predatory loans.”
“We discovered that we have to be responsive to some of our business technical assistance sessions to ensure that they don’t engage in those alternatives.”
To Foster, some of the biggest issues entrepreneurs of color are facing in Grand Rapids are systemic racism, gaps of information and internalized oppression.
“There’s a memo out there on prosperity,” Foster said. “Some of us haven’t gotten the memo.”
Foster hopes to see his work and the work of others eventually eliminate the racial wealth gap in Grand Rapids, and the overall United States, and to see generational wealth in families of color.
For more information, visit www.rendeprogresscapital.com.