African immigrant Falmata Bedasso is the Founder and CEO of Frontier Transportation Services LLC (FTS) based in Minnesota’s Twin Cities, a student transportation company that serves more than 200 students a day as a contractor for local school districts, including some of the metro’s largest. The company employs dispatchers, paraprofessionals, and operations staff in addition to drivers.
FTS caters to school districts that need additional transportation capacity to help get students – including those with disabilities – to and from school, activities, and after-school programs. Bedasso sees his company’s role as more than just transportation: he sees it as a way to connect communities.
“There is often a disconnect between students, schools, and drivers when it comes to clear communication. For us – and especially for students of African descent who may have language or cultural barriers to overcome – it is about bridging this gap.”– Falmata Bedasso
Ready to Grow, But Loan Options Limited
Business ownership had long been a goal for Bedasso, who founded the company in 2019, just in time for the pandemic to shutter schools in the spring. Despite this disruption, the company saw huge opportunity and growth during the 2021-2022 school year.
Once schools reopened, Bedasso was ready to scale up his business again. But it would have been difficult for the company to get a conventional loan from a traditional lender given that this new company had been essentially shut down during the pandemic.
Compounding the company’s financing difficulties were high fuel prices, driver shortages, and used vehicle availability during a period of extremely high demand. Getting FTS back on a growth trajectory would require strength and resilience, as well as a committed partner.
AEDS and MIGF
A longtime resource for Bedasso, African Economic Development Solutions (AEDS) – a member of the coalition that created the Minnesota Inclusive Growth Fund (MIGF) – stepped in with a loan from the Fund.
Established in 2008, AEDS is a lending organization that helps African immigrants statewide build and develop businesses. The organization was a driving force behind MIGF as part of the Catalyst Coalition, a group of five leading Minnesota-based small business support nonprofits.
Kedir Kurfessa, loan manager for AEDS, has worked closely with FTS since its founding and has helped Bedasso obtain financing and technical assistance in the past. He knew the MIGF loan – with its favorable interest rates and flexibility – would be perfect for the company, given its circumstances post-pandemic, and provided access to the fund for FTS. According to Kurfessa, loan options for FTS were few; the company needed a considerable sum to expand its fleet, but a lack of revenue in 2020 and 2021 prevented them from qualifying for conventional sources.
Immigrants are driving the Twin Cities’ economy. In 2017, there were 20,413 immigrant entrepreneurs in the Twin Cities, a 19 percent increase from 2016. (New American Economy)
FTS: Back on Track
Along with the MIGF loan and its longstanding relationship with AEDS, FTS relies on a well-rounded management team with experience in transportation to drive growth. With its loan in hand, FTS aims to double its capacity for the upcoming 2022-2023 school year. Now the company has more than 45 vehicles in service and 52 employees, many of them also African immigrants.
Bedasso is bullish on the company’s potential and predicting double or even triple growth for the 2022-2023 school year. Thanks to MIGF and AEDS, FTS now has the resources it needs to compete for new contracts, expand opportunity for its employees, and continue to provide the essential services school districts need to ensure educational equity and access.