Hailing from modest roots, Ralph Johnson is a serial entrepreneur who rose to become an industry leader and the founder of a thriving alternative financing firm on a mission to help small businesses and entrepreneurs achieve their dreams. His career in finance began 30 years ago when he joined an investment bank and graduated near the top of his 70-member training class. Before the age of 24, Ralph had already advanced to vice president, and in 1994, he led his first IPO banking transaction—taking public the company that pioneered the installation of dynamic video screens in elevators and on train platforms. He later became the youngest principal in a top equity trading firm’s 40-year history before joining a powerful NYSE member firm. There, he managed assets for a private client wealth group and helped fund proprietary hedge, venture, and real estate funds. By 2002, Ralph held seven different industry licenses within three different countries and had led or participated in capital raises totaling nearly $1 billion. He then went on to found and grow multiple businesses from zero to over $50 million. Today, Ralph has served more than 1,000 small businesses and funded approximately $120 million.
In the summer of 2020, facing the challenges of a worldwide pandemic, Ralph pivoted and merged his two growing private companies that independently offered alternative financing and small business consulting and founded Propellus, Inc., with the goal to help entrepreneurs access and manage working capital, increase revenue, and optimize profitability. Through its partner and vendor network, the company offers additional payroll and tax services, payment processing solutions, and marketing expertise. With offices in New York and New Jersey in addition to remote teams of experts across the country, Propellus serves customers and investors all over the world. We recently met with Ralph to learn more about Propellus, what drives him to serve his fellow entrepreneurs, and how he’s helping small businesses and their owners to flourish.
What does your role as CEO encompass?
It’s my job to manage and guide the business as a collective unit. I’m very hands on with the day-to-day business—all facets of operations, sales, and investor relations—and I speak with all new customers before they’re funded. Although this is unorthodox, I want them to know that we’re going to treat them fairly and do everything we can to help them succeed. I also discuss our expectations to ensure that customers live up to their end and that they know we will live up to ours.
Tell us more about Propellus’s specific focus on assisting entrepreneurs and small business owners.
The owner-operated enterprise and generational family business tend to be underserved in this market. Many of these entrepreneurs are accustomed to wearing all the hats, and they sometimes lose efficiency by trying to do too much. To take some of the burden off their shoulders, we try to streamline their cash flow and show them how to improve sales and margins.
What inspired you to serve this select group of clients?
Although I never wanted for the necessities as a young boy, our family struggled financially. We were on welfare and didn’t have much. I learned the value of hard work and responsibility at a young age, and after graduating from high school I put myself through college by working multiple jobs and burning the candle at both ends. I’ve owned a handful of successful companies that I started from the ground up, so I intimately appreciate the struggles and dreams of small businesses and entrepreneurs. I also understand the barriers that many must overcome to obtain financing. That’s why I’m teaching them to fish rather than simply giving them fish. My goal is to educate small business owners and advise them on the amount of funding they need—enough to survive their current crisis, expand, or reach their current goals, but not so much that they struggle to pay it back.
How do you help small businesses and entrepreneurs streamline cash flow and improve their efficiency, sales, and margins?
We take a closer look at their day-to-day banking and revenue, identify good and bad patterns, and determine how their cash flow affects their business. Better cash flow can mean getting beneficial terms from suppliers or providing more efficient services to customers. By improving the economics on both sides of the ledger, reducing expenses, and increasing sales, the profit margin can be significantly widened. In turn, customers can avoid ending up in similar positions in the future and use our services and capital as tools to focus on growth rather than on catching up. I’m not out to take equity from the businesses of owner-operators or to act as their CFO. Many of them simply don’t have time to conduct such an analysis or explore better options, so we’re here to help inject capital and improve processes. In the post-COVID world, the supply chain is another challenge as prices of products have increased, and delivery times have expanded. Therefore, it’s even more important to for owners to run their businesses as efficiently as possible by cutting costs and increasing sales.
How has your experience with previous financial crises helped your clients thrive during difficult circumstances, most recently the COVID pandemic?
I believe that crisis is the textbook of leadership because challenges teach us how to evolve and adapt. During the banking crisis of 2007, there was a shift in alternative financing, and small businesses were struggling. So, I launched a company to help meet those needs. Similarly, Propellus was born as a response to COVID. We needed to protect the interests of our investors and to provide services for our customers—not only during the pandemic, but well into the future. My two previous companies, launched in 2007 and 2016 were privately held, so we merged them under one umbrella to form a new, public company. This strategy created additional value for us and for the people we serve. We’re now setting our sights on developing into a company with a $1 billion market cap.
What particular challenges did small businesses face during COVID, and how did you help them?
Many businesses shut down, so existing customers needed us to be sympathetic to the fact that they were bringing in zero revenue by no fault of their own. We had to be patient and wait until they reopened before we could resume collecting payments from them. Unfortunately, even after they reopened, they were faced with back rent payments, capacity restrictions, difficulty finding employees, reduced customer traffic, public safety concerns, and more. We approached each situation individually as they were all different. One by one, we restructured and resumed relationships in ways that worked for both them and for us. Many of our small business clients even emerged from the pandemic in a much stronger position.
Ralph is a graduate of Pace University, where he earned a bachelor’s degree in finance and management science. His MBA coursework was in international finance. He has also completed certificate programs in factoring and merchant cash advances, as well as the following designations: Accredited Management Accountant (AMA®), board certified Master Financial Planner (MFP®), Chartered Economist (ChE®), Chartered International Banker (CIB®), Chartered Trust and Estate Planner (CTEP®), and Registered Financial Consultant (RFC®).
Chief Executive Officer and Founder