SOURCE: Wells FargoDESCRIPTION:
SAN FRANCISCO, January 21, 2021 /3BL Media/ - As many small businesses are still experiencing hardship from the COVID-19 pandemic, Wells Fargo is working to support its customers in another round of the Paycheck Protection Program (PPP) and continuing to provide additional small businesses support through its Open for Business Fund. To date, the Open for Business Fund has deployed more than $84 million in philanthropic capital to Community Development Financial Institutions (CDFIs), which has helped an estimated 16,000 struggling minority-owned small businesses and helped keep in place 50,000 small business jobs. For the next round of PPP, the company is committing not to take a profit and will continue seeking out opportunities to support small businesses most in need.
The Open for Business Fund was created in July 2020 to provide capital and expertise for businesses hardest hit by the pandemic. Wells Fargo is donating approximately $400 million in gross processing fees from participating in the first round of PPP and has set aside about $250 million of that funding for CDFIs. This capital is expected to translate into roughly $1 billion in available financing for small business owners who collaborate with a CDFI, according to industry experts. The Open for Business Fund will continue to award grants to nonprofits serving small businesses throughout 2021.
“We are thrilled to see that the newest round of PPP funding specifically addresses assistance for diverse business owners,” said Mary Mack, head of Consumer and Small Business Lending at Wells Fargo. “Eighty-four percent of our PPP customers from the first round had fewer than 10 employees, and our average loan amount of $54,000 was the lowest among all of the participating large banks, showing our commitment to helping the smallest businesses in need. But we knew more was required for recovery, which is why we created the Open for Business Fund. Many Black, African American, Latinx, Asian American, Native American, women and veteran-owned businesses are closing at faster rates than the industry, but they can make it if we get the right resources to them.”
Thirty-two CDFIs across the U.S. have already received funding through Wells Fargo’s Open for Business Fund as another way to funnel capital and technical expertise into neighborhood businesses. Small business owners can visit this list to see which CDFIs are part of the program (PDF).
The funding accessed from the Open for Business Fund is proving essential to small business owners, enabling them to close the gap on rent, utilities, and employee pay, as well as make safety improvements or adapt their business to survive.
Julius “Eddie” Lofton, owner of JC Lofton Tailors in Washington, D.C., used his $10,000 grant from Wells Fargo through CDFI Local Initiatives Support Corporation to cover rent and utilities, as well as purchase supplies. Founded in 1939 as the first African American tailor shop and school in downtown D.C., JC Lofton Tailors is hoping business picks up this spring. “We’re all suffering now, but I told my tailors we just got to hold on together,” Lofton said.
“As a company, we’re very focused on fostering an inclusive recovery from COVID-19 and strengthening the small business sector for the long term,” said Nate Hurst, head of Social Impact and Sustainability. “What’s exciting about Wells Fargo’s Open for Business Fund is that it’s highly responsive to today’s pandemic-weary small business owners. CDFIs have a lot of flexibility to use the funds for emergency grants, paying down interest rates to lessen payments, low or zero-cost loans, and other relief and resiliency measures entrepreneurs need to stay afloat.”
Wells Fargo’s Open for Business Fund by the numbers:
- Established: July 2020
- Overall fund: roughly $400 million ($250 million for capital to CDFIs, $50 million for technical assistance, and $100 million for long-term resiliency programs)
- Business helped so far (projected): 16,000 via grants made through Dec. 31, 2020
- Percent of minority-owned businesses helped: 84%
- Jobs maintained (projected): 50,000 via grants made through Dec. 31, 2020
- Anticipated financing for small business owners: $1 billion
- Anticipated hours of technical assistance to small business owners: 7.5 million
Wells Fargo Paycheck Protection Program (PPP)* by the numbers:
- Funded more than 194,000 loans for $10.5 billion
- Average loan size of $54,000
- 61% of loans were for less than $25,000
- 78% of loans were for less than $50,000
- 84% of loans went to businesses with fewer than 10 employees
- Approved lending to companies representing a total of 1.3 million jobs
- 41% of loans were made to businesses located in low- to moderate-income areas or areas in 50% or higher minority census tracts
*PPP numbers from 2020
About Wells Fargo
Wells Fargo & Company is a leading financial services company that has approximately $1.9 trillion in assets and proudly serves one in three U.S. households and more than 10% of all middle market companies in the U.S. We provide a diversified set 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 and Investment Management. Wells Fargo ranked No. 30 on Fortune’s 2020 rankings of America’s largest corporations. In the communities we serve, the company focuses its social impact on building a sustainable, 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 at Wells Fargo Stories.
Source: Wells Fargo & Company
KEYWORDS: Wells Fargo, Open For Business Fund, small business, CDFI, NYSE:WFC