John Harmon knew the Equitable Small Business Initiative the African American Chamber of Commerce of New Jersey helped launch in February could have life-changing impact on the microbusinesses in the underserved communities the chamber aims to assist.
Harmon also knew the initiative would need assistance from the business community to fully serve its purpose.
On Tuesday afternoon in Trenton, the initiative got its biggest contribution yet, as Wells Fargo donated $2.5 million from the bank’s Open for Business Fund to the AACCNJ.
“Of all the things that have happened in the past year, of all the companies that have stepped up to give us support, this has to be at the top,” Harmon told ROI-NJ. “This is real money that will enable us to have real impact.”
Harmon said the AACCNJ, which is partnering with New Jersey Community Capital on the initiative, will use the donations to provide low-interest loans to microbusinesses. But he said the size of the donation will enable the AACCNJ and the NJCC do what they really need to do: offer technical support and assistance.
“This will help us help them get business plans together and provide the support they need to get on the right path,” he said. “It great to be able to loan money — and we have some really good businesses who need it — but more than just loaning money, we’re going to be able to teach them how to use it.
“You have to remember, most of these businesses are microbusinesses — with five employees or less. A lot of these types of businesses have not received the training they need to grow their businesses.”
Wells Fargo’s Open for Business Fund is a $420 million small business recovery effort nationwide. Wells officials said its goal is to help entrepreneurs recover and rebuild.
Wanda Saez, the senior vice president of social impact and sustainability for Wells Fargo, said the initiative focuses on increasing access to capital, technical expertise and long-term resiliency programs, especially for racially and ethnically diverse small business owners who have been hard hit by COVID-19.
“Wells Fargo’s Open for Business Fund is another avenue of support and enlists the expertise of (community development financial institutions) to urgently help diverse entrepreneurs recover and preserve the jobs they provide in their communities,” she said. “The funding will provide much-needed access to capital with increased equity in resources and technical assistance for local businesses who are the backbone of our local economies and neighborhoods.”
Through April, Saez said the fund is already projected to reach 26,000 small businesses, helping entrepreneurs keep roughly 75,000 jobs.
Businesses in New Jersey will be able to add to that number.
Harmon said the AACCNJ has a staff of three (soon to be four) dedicated to assisting small businesses.
“That’s all they do,” Harmon said. “They are 100% dedicated to helping small businesses.”
So far, Harmon said the group has been able to clear five of the 50 applications for assistance it has received. He said he hopes the remaining applicants will be processed by summer.
And he hopes this latest infusion of funding will lead to more applicants.
“This type of funding really has impact,” Harmon said. “The banking community has stepped up more than any other in the past year — and this donation will have the biggest impact yet.”
NJCC President Wayne Meyer agreed.
“We are proud to continue our longstanding partnership with Wells Fargo to enhance the lending ecosystem for diverse-owned small businesses across New Jersey,” he said. “The pandemic continues to highlight the historical challenges Black and Latinx entrepreneurs and small business owners face when trying to access equitable financing and business supports.
“The Equitable Small Business Initiative seeks to reverse this trend, grow vibrant local businesses and generate wealth for their owners and communities.”
William Pazmino, executive director of RBAC, said the $1 million his group received will go to good use.
“Small businesses are the most important component of our ability to recover and grow our economy, in a post-COVID world,” he said. “RBAC understands that growth happens when people work together — we are incredibly fortunate to receive this generous donation from Wells Fargo, which will allow us to provide financing to our small businesses recovery and rebuilding efforts. This partnership with Wells Fargo will drive our efforts to support local entrepreneurs and help our communities bounce back from the pandemic.”
RBAC will utilize the OFB grant to focus on serving small businesses throughout the state of New Jersey with a special focus on low- to moderate-income communities. The funds will serve as lending capital for COVID-19 relief, with an average loan size of $25,000, to help diverse business owners cover expenses associated with hardships caused by the pandemic.
CBAC CEO Harry Stone also was grateful.
“This partnership with Wells Fargo allows us to fill a lending gap that many traditional financial institutions are unable to fill,” he said. “We are grateful to help support small business in these challenging times and help fledgling businesses to grow and thrive.”
The funding to CBAC, which was announced earlier this year, will help underserved small businesses in South Jersey stay open, preserve jobs and expand microlending activities and programming for diverse business owners.