Wells Fargo announced on Thursday the details of its $400 million effort to help small businesses that have been affected by the COVID-19 pandemic keep their doors open.
Through its Open for Business Fund, the company said it will initially allocate $28 million in gross processing fees to nonprofits, also known as Community Development Financial Institutions, to help them provide capital, technical support and resiliency programs to small businesses and minority-owned businesses. The fund has begun accepting applications from CDFI’s for the first grant cycle, open now through Aug. 7.
Through the end of last month, Wells Fargo said it funded average loan sizes of $56,000 under the Paycheck Protection Program for more than 179,000 customers. Of the loans made, 84% were for companies with less than 10 employees; 60% were for $25,000 or less; and 90% were given to those who made $2 million or less in annual revenue.
“By donating approximately $400 million in processing fees to assist small businesses in need, Wells Fargo’s Open for Business Fund creates opportunities for near-term access to capital and addresses the road ahead to meaningful economic recovery, especially for Black and African American entrepreneurs and other minority-owned businesses,” Wells Fargo CEO Charlie Scharf said. “Wells Fargo is committed to helping small businesses impacted by COVID-19 stay open and get back to growth.”
Some of the first grantees:
- Expanding Black Business Credit Initiative will launch the Black Vision Fund to increase the flow of capital to Black-focused CDFIs;
- Local Initiatives Support Corp. will provide grants and low cost capital to 2,800 entrepreneurs.
“Black businesses have faced the largest shutdown of any diverse group in the country,” Ron Busby Sr., CEO of U.S. Black Chambers Inc., said. “We lost 41%, or 450,000 Black-owned small businesses, in this pandemic so far and all of those businesses provided jobs so we need to accelerate an economic agenda that helps them recover. The funding that Wells Fargo is putting back into Black businesses and other minority-owned small businesses across the country is truly going to be appreciated and will give the kick start entrepreneurs need to continue and grow.”
Since 2015, the $175 million Wells Fargo Diverse Community Capital program has enabled more than 90 CDFI’s to finance $1.6 billion in loans.
