Veteran business owner Jashan Eison is just the kind of client that CEO Gary Cunningham likes at MEDA, the expanding nonprofit business counselor and financier to small, minority-owned businesses.
In fact, Eison is no longer a client.
His H&B Elevators, a north Minneapolis manufacturer, has been successful. Eison several years ago paid off a $250,000 MEDA loan that was part of a several-million-dollar acquisition-financing package. Eison is fully banked by a commercial lender. And he’s a MEDA board member.
H&B, with 50-plus employees who make up to $24 an hour plus benefits, has grown from $6 million in sales in 2013 to $11 million.
“Jashan was a client who saved, worked hard and invested and grew and hires from the North Side community,” Cunningham said. “And now he’s doing well and giving back.”
So is MEDA under Cunningham.
Cunningham, 61, took over the somewhat static organization in 2014. Founded in 1971, capitalized traditionally with government and corporate money, MEDA’s mission is to counsel and finance fledgling minority businesses, as well as help take more-established small businesses to the next level where they can be fully backed by commercial lenders, such as the case of H&B elevators.
Cunningham has grown MEDA’s capital, thanks to his connections with local-to-national corporations and foundations, from about $5 million to nearly $20 million. His goal is $50 million within several years. A growing, good-performing loan portfolio and consulting business increasingly means less reliance on the $3.5 million MEDA gets in government and foundation grants, about half its revenue.
“We’re heading toward less ‘soft money’ and a more sustainable, earned-income future,” Cunningham said.
The progress and growth have been significant under Cunningham’s leadership.
“It’s not just good, it’s transformational,” said Joel Lebewitz, the veteran CPA and partner at Lurie who is a longtime MEDA board member. “State funding really helped us keep going in past years. Our goal is to wean ourselves off that.”
Cunningham is not a lender or a technician. He is a communicative leader, known as a good delegator.
“Gary has big ideas,” Lebewitz said. “He kept key people in place at MEDA. And brought in a few others who are doing well. He has a clear, understandable vision. And he knows what he needs. Most of the time he’s right. He bites things off in chewable pieces.”
A graduate of Minneapolis Central High School who earned a master’s degree from Harvard, Cunningham turned around once-foundering NorthPoint Health, ran the planning unit of Hennepin County and was an executive at the Northwest Area Foundation before joining MEDA.
Cunningham also is driven in this work by well-documented Federal Reserve research that shows minorities, particularly blacks, have far less wealth, partly because of historically limited opportunities. Entrepreneurship and ownership often offer the best way to build wealth. And women and minorities, including immigrants, are the majority when it comes to small business growth.
“On average, entrepreneurs have more wealth and entrepreneurship closes the ‘wealth gap,’ ” Cunningham said. “I want a society that works well for everyone. Minority entrepreneurs usually are undercapitalized and need guidance and initial capital to get past the tough initial years.”
Cunningham has been able to attract MEDA capital from financial institutions and foundations, locally and nationally.
And MEDA’s $1 million Challenge for Minority Entrepreneurs, the semifinals of which were held during last month’s Twin Cities Startup Week, brought a national minority-business sweepstakes and business-accelerator program that’s garnered national attention. The finals are here in January.
He has forged new relationships at MEDA with the likes of Junior Achievement, to connect more minority youth to entrepreneurship, as well as partnerships with the brass at U.S. Bancorp, Ecolab, Best Buy and Target. They have dedicated financial and employee resources to MEDA.
In fact, Target invested $2 million to build out MEDA’s spacious new headquarters in the just-opened Thor Cos. building at Plymouth and Penn avenues N., a multi-structure project at what had been a moribund corner.
Target also is providing rent subsidy for MEDA, which left cramped space in downtown Minneapolis to move into the business-hungry North Side.
“I have a five-year strategy that the board has bought into that aligns with the business community,” Cunningham said.
MEDA also has formed “Catalyst,” a software-based program with several smaller Twin Cities-based economic-development outfits that increases “the quality and quantity of products and services” as a one-stop minority business support system.
In recent years, MEDA has doubled the number of small firms to which it provides technical assistance to 800-plus annually. It is a direct lender of $17.2 million to nearly 400 businesses this year, often in partnership with commercial lenders who have loaned another $19 million.
That activity alone accounts for about 2,600 jobs that pay average hourly wages of $20.35 per hour.
Cunningham, who was paid nearly $270,000 last year, said he has qualified borrowers in the pipeline for another $21 million in loans.
Those loans will be made only as MEDA adds more capital.
“Our 850 clients of all types, including just technical assistance, have revenue of $1 billion-plus,” said Cunningham. “We think we’ll get them to $2 billion to $3 billion. We want more businesses that are at $1 million in revenue or have the capacity to get there.
“We need to keep building a smarter, bigger machine.”
Eison, the MEDA client turned board member, is betting on Cunningham.
“Gary is able to raise capital to support these businesses,” Eison said. “He’s generated a buzz, a new headquarters and national interest. He’s generated attention for the mission.”
Neal St. Anthony has been a Star Tribune business columnist and reporter since 1984. He can be contacted at firstname.lastname@example.org.