More than 336,000 small businesses benefited and more than 461,000 jobs were created in communities across the United States.
San Francisco, July 24, 2024–(BUSINESS WIRE)–Wells Fargo today announced the latest community impact of its Open for Business Fund, a nearly $420 million nationwide small business recovery effort to support small businesses hit hardest during and after the COVID-19 pandemic. Launched in 2020, the Open for Business Fund has benefited more than 336,000 small businesses to date, empowering them to preserve or create more than 461,000 jobs in communities across the nation, according to grantees' reported funding.
“We put all of the total fees we paid to the government for administering the Paycheck Protection Program in 2020 into a nearly $420 million fund with the sole purpose of supporting small business owners struggling during the COVID-19 pandemic,” Wells Fargo CEO Charlie Scharf said in a statement. “Our funding provided capital and expertise at scale, ultimately creating local jobs, strengthening the ecosystem of support, and creating a ripple effect that continues to strengthen communities across the country.”
“At the time, we were struggling to keep our store open and our employees, who are like family to me,” says Julius “Eddie” Lofton of JC Lofton Tailors, a family-run Washington, D.C., business that has been in business since the 1930s. “When we received the $10,000 grant, I felt a weight was lifted and I knew I could continue our family traditions.” Lofton was an early recipient of a Local Initiative Support Corporation grant and has since renovated his store as business has improved.
Reaching small business owners who often struggle to access capital and expertise was a priority for the program to protect livelihoods and jobs. The most recent data reported by Open for Business Fund grant recipients shows that 79% of benefiting small business owners were racially and ethnically diverse, 53% were women, and 72% were low- to moderate-income individuals.
Strengthening the SME ecosystem
Community organisations say lessons learned from the Open for Business Fund will provide a roadmap for future investments in the small business community.
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Understanding the Value of Flexible Capital for Nonprofits and CDFIsWells Fargo's grants were designed to provide flexible capital to help Community Development Financial Institutions (CDFIs) and nonprofits address the unique needs of their communities. This strategy enabled the nonprofits to retain new staff and acquire new technology to streamline, customize, and reduce costs of lending and technical assistance. Increased efficiency enabled the organizations to serve more small business owners, deepening their impact in their communities.
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Listening to the demand for personalized technical expertiseThe program provided more than 1.1 million hours of technical assistance to small businesses, more than 50% of which was delivered in a one-on-one format, allowing small business owners to receive expertise tailored to their business. More importantly, delivering expertise in culturally appropriate language enabled organizations to better engage small business owners and expand their reach.
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Scaling innovation to meet the changing capital needs of small business ownersGrant funding has enabled organizations to pilot new products and expand credit lines to serve more individuals who are outside the financial mainstream. Grant recipients reported providing more than $1.4 billion in equity grants, low-cost loan products, and loan deferrals, modifications, and forgiveness that provided a lifeline to businesses.
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Bridging the digital divide for small and medium-sized businessesAs the economy becomes increasingly digital, it is crucial for small businesses to build their technology 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 pivot to an online customer service model.
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Leveraging grants to strengthen nonprofit balance sheetsGrantees reported using Open for Business Fund grants to secure additional private and public sector funding to support their capital deployment and technical assistance programs, resulting in a 7:1 leverage of Wells Fargo funding.
“Wells Fargo's grant funding helped the VA successfully attract investors and CDFIs to inject $15 million in loan capital, while also helping member CDFIs like the People Fund expand lending to veterans and provide expertise in areas like marketing, accounting and inventory management across the country,” said Gustavo Lasala, president and CEO of the People Fund, a proud member of the VA.
Shifting focus to asset ownership and future growth
The final phase of the Open for Business Fund is running through 2025. In five markets – Atlanta, Charlotte, Houston, Los Angeles and Miami – small business owners are building generational wealth by acquiring valuable tangible assets such as commercial real estate, equipment and technology.
“Thanks to the Open for Business Fund's support, we're able to purchase new equipment, change the way our team works and better serve our customers,” said Sara Agudelo, owner of Purple Orchid, a health food and beverage company that worked with grant recipient Miami Foundation and has 50 employees. “Now I'm dreaming of getting commercial property for my business, which is something I never thought would be possible.”
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a leading financial services company with approximately $1.9 trillion in assets. The company offers banking, investment and mortgage products and services, as well as a diversified set of consumer and commercial financing through four reportable business segments: Consumer Banking & Lending, Commercial Banking, Corporate & Investment Banking, and Asset Management & Investment Management. Wells Fargo is ranked 34th on Fortune magazine's 2024 ranking of America's largest companies. The company is committed to social impact in building a sustainable and inclusive future for all by supporting housing affordability, small business growth, financial strength and a low-carbon economy in the communities we serve. News, insights and perspectives from Wells Fargo can also be found at Wells Fargo Stories.
For more information, visit www.wellsfargo.com.
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