More than 336,000 small businesses benefited, enabling more than 461,000 jobs in local communities across the US.
SAN FRANCISCO, July 24, 2024–(BUSINESS WIRE)–Wells Fargo today shared the latest community impact from the company’s Open for Business Fund, a national small business recovery effort totaling approximately $420 million to help those most impacted during and after the COVID-19 pandemic. Launched in 2020, grantees report that the Open for Business Fund has now benefited more than 336,000 small businesses, empowering them to retain or create more than 461,000 jobs in communities across the country.
“We took the gross processing fees that the government paid us to administer the Paycheck Protection Program in 2020 and put it all into a fund of approximately $420 million whose sole purpose is to help small business owners who are struggling during COVID,” said Charlie Scharf, Wells Fargo CEO. “Our fund is being used to provide capital and expertise at scale, ultimately creating local jobs, strengthening the support ecosystem, and creating a ripple effect that continues to strengthen communities across the country.”
“At the time, we were under a lot of pressure to stay open and keep our employees who were like family to me,” said Julius “Eddie” Lofton of J.C. Lofton Tailors in Washington, D.C., a family business that dates back to the 1930s. “When I got the $10,000 grant, it lifted a weight off my shoulders, and I knew I was going to keep my family’s legacy going.” Lofton was one of the first recipients of a grant through the Local Initiatives Support Corporation and has since renovated his shop as business has improved.
Reaching small business owners who often struggle to access capital and skills is a priority for the program to sustain livelihoods and jobs. Recent data reported by Open for Business Fund grantees shows that 79% of small business owners who benefited were racially or ethnically diverse, 53% were women, and 72% identified as low- to moderate-income individuals.
Strengthening the small business ecosystem
Community organizations say lessons learned from the Open Fund for Business are a roadmap for future investments in the small business community.
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Understanding the value of flexible capital for nonprofits and CDFIs. By design, Wells Fargo grants are provided as flexible capital so that Community Development Financial Institutions (CDFIs) and nonprofits are empowered to respond to the unique needs of their communities. This strategy allows nonprofits to hire new staff and acquire new technology to simplify, adapt and reduce the costs of their lending and technical assistance. Increased efficiencies position the organizations to serve more small business owners, deepening their impact on the community.
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Listen to requests for personalized technical expertiseThe program provides over 1.1 million hours of technical assistance to small businesses with over 50% delivered in a one-on-one format so small business owners can receive expertise tailored to their business. More importantly, delivering expertise in culturally relevant languages allows the organization to increase small business owner engagement and expand reach.
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Developing innovations to meet the changing capital needs of small business owners. Grant funding allows organizations to pilot new products and expand their credit buckets, allowing them to serve more individuals outside the financial mainstream. Grantees report providing more than $1.4 billion in equity grants, low-cost loan products, loan deferrals, modifications and forgiveness that provide a lifeline for businesses.
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Closing the digital divide in small businessesAs the economy becomes increasingly digital, there is a critical need for small businesses to build their tech skills and confidence so they can access available capital resources and acquire new customers. Online training and support services have proven effective in helping entrepreneurs save time and money and learn how to transition to an online customer service model.
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Leveraging grant capital to strengthen the financial balance of nonprofit organizationsGrantees reported leveraging their Open for Business Fund grant funds to secure additional private and public sector funding to support their capital placement and technical assistance programs, resulting in Wells Fargo funding leverage of 7:1.
“The Wells Fargo grant acted as a catalyst that enabled the Veterans Loan Fund to successfully attract investors and CDFIs, and in doing so, deploy $15 million in loan capital while helping member CDFIs like PeopleFund grow their lending to veterans and provide expertise in areas such as marketing, accounting, inventory management and more across the country,” said Gustavo Lasala, president and CEO of PeopleFund, a proud member of the Veterans Loan Fund.
Shifting focus to asset ownership and future growth
The final phase of the Open for Business Fund runs through 2025. Across five markets — Atlanta, Charlotte, Houston, Los Angeles and Miami — small business owners are building intergenerational wealth by acquiring valuable tangible assets such as commercial property, equipment and technology.
“The Open for Business Fund’s support allowed me to purchase new equipment that has transformed the way my team works to better serve our customers,” said Sara Agudelo, an employer of 50 and owner of Purple Orchid, a healthy food and beverage company that partners with The Miami Foundation, a grant recipient. “We now dream of acquiring commercial real estate for our business, something I never thought I would be able to do.”
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a leading financial services company with approximately $1.9 trillion in assets. We provide a diverse range of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth & Investment Management. Wells Fargo is ranked #34 on Fortune’s 2024 ranking of America’s largest companies. In the communities we serve, the company focuses its social impact on building a sustainable and inclusive future for all by supporting housing affordability, small business growth, financial health and a low-carbon economy. News, insights and perspectives from Wells Fargo are also available in Wells Fargo Stories.
Additional information can be found at www.wellsfargo.com
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Kim Ehrlichson
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