Raghu Chejarla was first exposed to entrepreneurship while working at his father’s pharmaceutical business in India. As he followed his own path, it led him to the U.S. where he began a successful career in engineering. But when they were getting ready to have children, Raghu and his wife decided it was time to start a small business of their own.
“We got inspired because both of our parents are entrepreneurs and ran their own small businesses,” Raghu said. “If we show ourselves as an example, our hope is that we can motivate our kids and others to show them that they too can run their own business.”
With more than a decade of information technology (IT) experience between the two of them, Raghu and his wife, Susie Ruddarraju, launched HighCloud Solutions in 2015. Located in St. Paul, MN, HighCloud Solutions has a mission to help its customers solve their IT problems by providing IT consulting and staffing services while employing at least 35% of employees from local low-income areas.
An unexpected interruption to business
HighCloud Solutions’ primary clients are state and other local government agencies. They also perform subcontract work for several large corporations. During their first five years of operation, the business was growing.
But in 2020, the pandemic caused IT-related budget cuts at state and local governments, which significantly impacted HighCloud Solutions.
“We didn’t have any contracts to go after during the pandemic,” Raghu explained. “We are seeing that things are coming back this year, but we are still struggling.”
Though business was slow, Raghu and Susie stayed motivated. They used this time to earn several certifications for the business and continue their business education. They applied for emergency loans through the Federal Paycheck Protection Program (PPP) and the U.S. Small Business Administration (SBA), but still needed additional capital to navigate the unforeseen challenges.
Getting back on track with flexible financing
As they continued their search, they eventually discovered the Minnesota Inclusive Growth Fund (MIGF). MIGF, created by a group of five local mission-driven lenders, is designed to increase access to flexible and affordable capital and small business support services for underbanked businesses across Minnesota that have suffered a direct economic disruption as a result of COVID-19 or civil unrest.
After applying for MIGF financing, Raghu and Susie were connected with Community Reinvestment Fund, USA (CRF), one of the program lenders. In working with CRF, they secured the loan they needed for working capital to maintain their current staff and hire additional employees.
“Not all loans out there are flexible to use for working capital,” Raghu said. “We don’t produce any products because we are a service company, and most of our expenses are our employees. Being able to use loan funds toward our salaries is big for us.”
Raghu and Susie are now working to put the challenges of the pandemic behind them and focus on the future. Raghu has plans this year that he hopes will expand the business and help secure a national clientele. Plans he may not have been able to execute without securing the capital he needed.
“I am able to take these steps because of the confidence we have knowing we’re going to have working capital for this year and into next year,” Raghu said. “That confidence is helping us to take actions we couldn’t take before.”