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Novant Health Provides $5 Million Loan Program for Diverse Firms
Pictured is the Novant Health Forsyth Medical Center in Winston Salem, North Carolina. Novant Health is a fourstate integrated network of physician clinics, outpatient centers and hospitals. Its network consists of over 1,600 physicians and 28,000 employees at more than 630 locations, including 15 medical centers and hundreds of outpatient facilities and physician clinics. (By David Bjorgen - Own work)
Novant Health Provides $5 Million Loan Program To Help Diverse Firms Build Capacity
Many diverse firms have the capabilities needed to grow a company to scale, but often struggle when seeking capital to reach their full potential. Novant Health Senior Director of Supplier Diversity & Performance Kevin Price had first-hand experience with this challenge when he joined the company after a career in the banking industry. Novant recruited Price to become its first supplier diversity manager in 2006, and he hoped one day to have the opportunity help firms address the challenge of finding capital to grow a successful company. Although it took a while to bring his vision to reality, Price was able to help Novant create a program to help businesses get access to working capital in 2018.
Novant Health is a $4.6 billion, four-state integrated network of physician clinics, outpatient centers and hospitals based in North Carolina, and doing business in South Carolina, Virginia and Georgia. The company’s network consists of more than 1,600 physicians and 28,000 employees at more than 630 locations, including 15 medical centers and hundreds of outpatient facilities and physician clinics.
In his current role, Price worked with M&F Bank, a minorityowned bank headquartered in Durham, North Carolina, to develop the Diverse Supplier Community Reinvestment Program, a loan program for diverse firms participating in Novant’s Supplier Diversity Program. The loan program leverages $5 million in Novant deposits at M&F Bank to serve as collateral to support a loan guaranty program providing working capital to diverse firms. “We already had the deposits with M&F Bank, so we had the assets to support the program.” Price said. He continued, “M&F President James Sills told me, ‘We need to loan some of this money out so we can pay you interest.’”
This statement provided the spark Price needed to help create one of the few loan programs in the country sponsored by a major corporation. Sills said of the program, “The Diverse Supplier Community Reinvestment Program serves our mission as a community bank very well and satisfies our credit risk criteria. It offers the potential of a very positive impact in all the communities served by M&F and by Novant Health.”
Kevin Price Novant Health Senior Director, Supplier Diversity & Performance
Eligibility for the lending program is two-fold: 1) be a diverse business owner who is a participant in Novant’s Supplier Diversity Program; and 2) have a direct contracting relationship with Novant Health. The application process involves completing an online application on the M&F Bank website, and then completing the standard underwriting process. Once M&F reviews the loan application for approval, Novant will confirm whether the applicant meets the criteria and is approved for the loan guaranty. “The program is a great opportunity for firms that have a strong company, but due to some issues like a lack of collateral or a blemish on their credit history, may not be able to get financing through a traditional bank,” Price said. The maximum loan amount for any borrower is $250,000.
Program Success Story
Elite Touch Cleaning, a commercial cleaning company based in Charlotte, North Carolina, secured a $150,000 line of credit through the program in 2018. The company won its first contract with Novant in 2008, providing cleaning services to a distribution center in Kannapolis, North Carolina, and has maintained the contract since. After years of moderate growth, the company’s growth began to take off in 2017, after Novant sponsored owner Mario Mendigana to attend the Dartmouth College, Tuck Business School’s “Building a High Performing Minority Business” executive education program. The program helped Mendigana develop a plan to accelerate the company’s growth and helped clarify his path forward. “The program helped me put a strategy together and see the light at the end of the tunnel of how to grow the company,” he said.
Elite Touch has doubled in size since completing the Tuck program, and the overall improvements helped the company create the necessary track record to secure a loan guaranty from Novant. “The line of credit has definitely helped us on the cash flow side,” Mendigana said. “We use the line to help cash flow in our general operations.” Mendigana is so thrilled by the growth of his company since attending the Tuck program that he signed up at his own expense to return to the school in June 2019, for the “Growing a Minority Business to Scale” course, the second part of the program he attended in 2017.
Minority businesses participate in the Dartmouth College Tuck Business School’s “Building a High- Performing Minority Business” executive education program. Novant Health is a member of the Healthcare Alliance, sponsor of the healthcare-focused training program.
Moving Forward
Price believes the loan program can help other businesses build capacity as well. Novant has several upcoming procurement projects that will present opportunities to do business with the corporation, based on the company’s commitment to supplier diversity. “Our supplier diversity program has grown tremendously since we started in 2006,” Price said. Novant's spend with diverse companies reached more than $111 million during 2018, approaching an increase of $100 million per year since 2006. Price has tracked the total spending with diverse companies since the start of the prorgram and says it is now approaching $1 billion. "Supplier diversity has become a part of our culture, and we have commitment from our executive leadership and our board of directors," Price said. “Supplier diversity has become a part of our culture, and we have commitment from our executive leadership and board of directors.”
Price also has become a leader in supplier diversity on the national stage. He serves in a leadership role of the Health Care Industry Group in the National Minority Supplier Development Council (NMSDC) and is active in a regional affiliate council of NMSDC and the Women’s Business Enterprise National Council.
Novant is anticipating continued growth of its supplier diversity program in 2019 and beyond as the company prepares to launch major projects to continue its corporate growth. One upcoming project is a new $150 million hospital located in the Ballantyne area of Charlotte beginning in 2020. The company has received approval to build the facility and will begin design activities in 2019. Other ongoing opportunities are expected in the areas of facilities maintenance, supplies, equipment and services. “Our goal for major projects is 20%,” Price said. “And all of our core areas have their own goals for diversity spend. Those areas are Real Estate & Construction, Finance, Information Technology, and Supplies and Services.” He advises companies interested in joining Novant's Supplier Diversity Program to visit the program's page on their website at www.NovantHealth.org to register.
