Wells Fargo 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, grantees report the Open for Business Fund has now benefited more than 336,000 small businesses, empowering them to keep or create more than 461,000 jobs in communities from Harlem to Hollywood with companies in Harlem like Harlem Entrepreneurial Fund, Columbia-Harlem Small Business Development Center).
“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,” said Charlie Scharf, CEO of Wells Fargo. “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.”
“At the time, we were stressed about keeping the lights on and retaining employees who are like family to me,” said Julius “Eddie” Lofton of JC Lofton Tailors in Washington, D.C., a family business since the 1930s. “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.
“… small business owners who benefited are racially or ethnically diverse …”
Reaching small business owners who often struggle to access capital and expertise was a priority for the program in order to preserve livelihoods and jobs. The newest data reported by Open for Business Fund grantees indicates 79% of small business owners who benefited are racially or ethnically diverse, 53% are women, and 72% identify as low-to-moderate income individuals.
Strengthening the small business ecosystem
Community organizations say the lessons learned from the Open for Business Fund are a roadmap for future investment in the small business community.
- Understand the value of flexible capital for nonprofits and CDFIs. By design, Wells Fargo grants were given as flexible capital so that Community Development Financial Institutions (CDFIs) and nonprofits were empowered to be responsive to the unique needs of their communities. 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.
- Listen to the demand for personalized technical expertise. The program provided more than 1.1 million hours of technical assistance to small businesses with more than 50% provided in a one-to-one format so small business owners could receive tailored expertise for their businesses. More importantly, the delivery of culturally relevant in-language expertise enabled organizations to increase small business owner engagement and expand reach.
- Expand innovations to meet the changing capital needs of small business owners. Grant funding allowed organizations to pilot new products and expand their credit box, enabling them to serve more individuals outside of the financial mainstream. Grantees report providing more than $1.4 billion in equity grants, low-cost loan products, loan deferrals, modifications, and forgiveness which provided a lifeline to businesses.
- Close the small business digital divide. As the economy has become increasingly digital, there is a critical need 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 proved to be effective in helping entrepreneurs save time and money and in learning how to pivot to online customer service models.
- Leverage grant capital to strengthen nonprofit balance sheets. Grantees report leveraging their Open for Business Fund grants to secure additional private and public sector dollars in support of their capital deployment and technical assistance programs, resulting in a 7:1 leverage of Wells Fargo funding.
“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,” said Gustavo Lasala, president and CEO at PeopleFund, a proud member of Veteran Loan Fund.
Shifting focus to asset ownership and future growth
The final phase of the Open for Business Fund is still underway into 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 property, equipment, and technology.
“The Open for Business Fund support allowed me to buy new equipment that changes the way my team works to better serve customers,” said 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. “Now we are dreaming of acquiring commercial real estate property for the business, something that I never thought I would be able to do.”
Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a leading financial services company that has approximately $1.9 trillion in assets. 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 & Investment Management. Wells Fargo ranked No. 34 on Fortune’s 2024 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.
Photo credit: Wells Fargo’s Senior Vice President, Community Relations for the Northeast Region Krissy Moore (left) celebrated graduates from Columbia Business School’s First-Generation Entrepreneurs Program for high school students with Columbia Business School officials in Harlem in fall 2022. The Columbia-Harlem Small Business Development Center and its programs for small businesses benefitted from Wells Fargo’s Open for Business Fund grants..
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