RISE TO THE TOP
Lender’s success has drawn the attention of the Business Development Bank of Canada
If you were a bank loans officer, Chris Ralph likely isn’t the sort of fellow you’d take a risk on.
Ralph’s dream was to open an acting school in downtown Ottawa with his business partner, John Muggleton. His past included years at sea aboard icebreakers in the Arctic and Antarctica and a long stint on rock bottom as a cocaine addict.
“We didn’t have a lot of business experience — we were theatre teachers and actors,” Ralph said. “As entrepreneurs, we didn’t have any hope of working with the bank ... and with my own past — I did a lot of recreational drugs when I was in my 20s and 30s, so there was some financial wreckage from my past that probably made me not a real attractive candidate.”
Ralph and Muggleton were working on their proposal with Invest Ottawa when they were put in contact with Rise Asset Development, a notfor-profit charity that specializes in providing micro loans to entrepreneurs whose background with mental illness or addiction prevents them from getting bank loans.
Three years ago, the Acting Company was born, thanks to a $7,500 loan from Rise that paid the first and last month’s rent and for interior renovations in an old movie house on Bank Street at Second Avenue. Ralph and Muggleton now have some 300 students a week — from schoolchildren to an 81-yearold retiree — and stage theatre, music night and fundraisers in their rejuvenated Avalon Theatre.
“Rise was really great to us,” Ralph said. “We really couldn’t have opened the business without them.”
That sort of success story is not unusual for Rise, which was established in 2009 as a partnership between the Rotman School of Management at the University of Toronto and the Centre for Addictions and Mental Health.
Since then, Rise has lent more than $500,000 to 140 entrepreneurs, says its executive director, Jodi Butts. Its default rate is just seven per cent, only slightly worse than the default rates on loans at the big banks.
“We make our lending decision on a very different basis than a regular bank,” Butts said.
“We take a really good look at the business plan, because that’s what is going to drive the ability to repay. A lot of banks don’t pay much attention to that because they look at assets and credit rating.
“And we look at the personal readiness of the person. We understand that people open new chapters in their life.”
Rise’s successes has now attracted the attention of the Business Development Bank of Canada, which is contributing $40,000 annually to Rise over the next three years and offering the expertise of its “small army” of professionals, says Craig Ryan, BDC’s director of corporate social responsibility.
The partnership is a “perfect match,” he said.
“Our purpose is supporting entrepreneurs and these are a group that we had not been reaching and are as deserving of support as any other.”
An added benefit “is the conversations that now take place at the water cooler at the BDC about mental health issues,” Ryan said.
“Suddenly, people are more comfortable talking about it. That’s powerful.”