Wells Fargo has shared the latest community impact of the company’s Open for Business Fund, a roughly $420 million national small business recovery effort to help those hardest hit during and after the COVID-19 pandemic. Launched in 2020, the grantees report the Open for Business Fund has now benefited more than 336,000 small businesses, enabling them to keep or create more than 461,000 jobs in communities nationwide.
Reaching small business owners who often struggle to access capital and expertise was a priority for the program to preserve livelihoods and jobs. The newest data reported by Open for Business Fund grantees indicates that 79% of small business owners who benefited are racially or ethnically diverse, 53% are women, and 72% identify as low-to-moderate-income individuals.
Community organizations say the lessons learned from the Open for Business Fund are a roadmap for future investment within the small business community.
By design, Wells Fargo grants were given as flexible capital so that Community Development Financial Institutions (CDFIs) and nonprofits were empowered to respond to their communities’ unique needs. And this strategy enabled nonprofits to secure new staff and acquire new technology to streamline, customize, and decrease the cost of their lending and technical assistance. Increased efficiency positioned organizations to serve more small business owners, deepening community impact.
The program provided over 1.1 million hours of technical assistance to small businesses, with more than 50% of the assistance provided in a one-to-one format so small business owners could receive tailored expertise for their businesses. More importantly, delivering culturally relevant in-language expertise enabled organizations to increase small business owner engagement and expand reach.
Grant funding enabled organizations to pilot new products and expand their credit box, enabling 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, providing businesses a lifeline.
As the economy has become increasingly digital, small businesses must build their technology skills and confidence to 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 pivot to online customer service models.
Grantees report leveraging their Open for Business Fund grants to secure additional private and public sector dollars to support their capital deployment and technical assistance programs, resulting in a 7:1 leverage of Wells Fargo funding.
The final phase of the Open for Business Fund is still underway into 2025. Small business owners in five markets — Atlanta, Charlotte, Houston, Los Angeles, and Miami — are building generational wealth by acquiring valuable tangible assets such as commercial property, equipment, and technology.
KEY QUOTES:
“We took the gross processing fees the government paid us for administering the Paycheck Protection Program in 2020 and committed all of it to a roughly $420 million fund whose singular purpose was to assist small business owners having a hard time during Covid. Our funds went toward providing capital and expertise at scale, ultimately creating local jobs, bolstering the ecosystem of support, and creating a ripple effect that continues to strengthen communities across the country.”
– Charlie Scharf, CEO of Wells Fargo
“At the time, we were stressed about keeping the lights on and retaining employees who are like family to me. When I got a $10,000 grant, it lifted a burden off me, and I knew I’d maintain my family’s legacy.” Lofton was an early recipient of a grant through Local Initiatives Support Corporation and has since renovated his shop as business improved.”
– Julius “Eddie” Lofton of JC Lofton Tailors in Washington, D.C., a family business since the 1930s
“The Wells Fargo grant acted as a catalyst that allowed the Veteran Loan Fund to successfully attract investors and CDFIs, and thus, deploy $15 million in loan capital while also helping member CDFIs like PeopleFund grow their lending to veterans and provide expertise in areas like marketing, accounting, inventory management, and more across the country.”
– Gustavo Lasala, president and CEO at PeopleFund, a proud member of Veteran Loan Fund
“The Open for Business Fund support allowed me to buy new equipment that changes the way my team works to better serve customers. Now we are dreaming of acquiring commercial real estate property for the business, something that I never thought I would be able to do.”
– Sara Agudelo, employer of 50 people and owner of Purple Orchid, a healthy food and beverage company that worked with The Miami Foundation (a grantee)
