Wells Fargo Invests $18.5 Million in Grants to Ease Small BusinessStress and Expand Access to Capital
SAN FRANCISCO, February 28, 2019 /3BL Media/ Wells Fargo announced $18.5 million in grants today to nine Community Development Financial Institutions (CDFIs) so they can unlock capital or increase training to diverse small businesses across the U.S. Two CDFIs are receiving awards to continue their work supporting entrepreneurs in Puerto Rico, which is still recovering from the aftermath of Hurricane Maria.
The latest round of funding is part of the company’s ongoing Wells Fargo Works for Small Business: Diverse Community Capital program, which was created to empower diverse small business owners with a $175 million commitment through 2020. Since its inception in 2015, the program has awarded $94.8 million to 92 CDFIs in rural and urban areas. According to Opportunity Finance Network (OFN)’s evaluation of the first phase of the program, diverse small business borrowers from the first 44 CDFI awardees have already created and sustained more than 45,000 local jobs as a result of accessing capital and development services.
“Small businesses are essential to a vibrant community, no matter where you live,” said Connie Smith, Wells Fargo’s Diverse Community Capital program manager. “These ‘activator grants’ are designed to drive inclusive economic growth and significantly scale resources that help underrepresented entrepreneurs grow and stay resilient in the face of economic challenges. CDFIs are such an important partner in cultivating small business growth, and the recipients in this round have a long track record of success and leadership in the communities they serve.”
The Diverse Community Capital grant recipients are:
- Accion, Inc. ($2.7 million): Based in Albuquerque, N.M. and serving five states in the southwest and mountain west, Accion will utilize its three-year grant to automate, market and scale an innovative loan product, Presto Loan, that has the potential to reach significantly more diverse entrepreneurs across Arizona, Colorado, Nevada, New Mexico and Texas. The product will offer loans up to $12,000, flexible underwriting criteria, affordable rates and a turnaround time of fewer than three days.
- Carolina Small Business Development Fund ($2.8 million): The fund will seek to build minority small business capacity in North Carolina through expanded relationships with historically black colleges and universities. The grant also will be used to introduce an online development resource for more than 300 entrepreneurs interested in starting or growing a business.
- Community Reinvestment Fund ($2.7 million): This Minneapolis-based nonprofit will expand access to capital for diverse small business owners by investing in two technology platforms — Connect2Capital® and SPARK. Connect2Capital will help reach and match entrepreneurs with the CDFI that best meets their needs and SPARK will help build the capacity of mission-driven lenders by providing a scalable, secure and streamlined loan origination process. Connect2Capital alone will aim to close more than 1,000 loans and distribute $50 million in capital over three years.
- Hope Enterprise Corporation (HOPE) ($2.8 million): This seasoned CDFI focuses on building assets and improving lives in the Deep South, specifically in persistent poverty counties in Alabama, Arkansas, Louisiana, Mississippi and Tennessee. With its grant, HOPE will provide technical assistance and credit-enhanced loans for more diverse small business owners. As a result of accessing needed capital, more high-quality jobs will likely be created and retained.
- Main Street Launch ($2 million): Based in Oakland, Calif., Main Street Launch will activate an African American Entrepreneurship Institute, offering intensive training to prepare more businesses for success and building wealth. Topics will include business critical areas such as ecosystem building with community partners, supply chain effectiveness, operational readiness, financial education and succession planning.
- Metropolitan Economic Development Association ($1.5 million): The nonprofit CDFI will pilot and expand its bank enterprise system to create more access to loan capital for diverse small business owners across the Midwest. Over three years, the association plans to administer $50 million in loans and share best practices from its system with fellow CDFIs in the region and nationally.
- Self-Help Ventures Fund ($1.5 million): This nonprofit loan fund, based in Durham, N.C., will design a new line of credit for diverse developers as a way to fuel real estate and construction growth in Chicago and in North Carolina. The developer line of credit will allow minority entrepreneurs to more easily purchase a property and have capital to complete renovations. The grant will also support contractors, including African American, Latino, women and veterans, who want to grow their businesses.
- Local Initiatives Support Corporation ($1 million): The organization will focus on stimulating economic recovery in underserved communities in Puerto Rico that were deeply impacted by Hurricane Maria. A Kiva microcredit matching loan fund will be created to support entrepreneurs and small businesses, and credit-enhanced loans will be available for larger projects. LISC will also develop its organizational capacity and networks for responding to future natural disasters—supporting small businesses as part of broad economic recovery efforts.
- PathStone Enterprise Center, Inc. ($1.5 million): Based in Rochester, N.Y., the Center will deploy its grant towards small business recovery efforts in Puerto Rico. With its long history of working with the Puerto Rican community regionally and through its office in Ponce, Puerto Rico, the Center plans to establish a revolving loan fund with more flexible terms to help stabilize small business owners and embed resiliency planning against future economic challenges.
The Diverse Community Capital program is a collaboration between Wells Fargo and Opportunity Finance Network, a national network of CDFIs. Opportunity Finance Network offers a social capital component of the program to focus on helping CDFIs grow stronger through activities including in-person networking, mentorship, consulting and peer learning. According to Opportunity Finance Network, Diverse Community Capital awardees have closed more than $393 million through more than 8,000 loans to diverse small business clients, including African American, Latino, American Indian, women, and veterans, among others.
“Over the past three years, OFN has been privileged to work with the talented individuals at the many CDFIs that have received Diverse Community Capital Program awards from Wells Fargo,” said Donna Fabiani, executive vice president of Knowledge Sharing at Opportunity Finance Network. “We congratulate the new Activator Award recipients and are eager to see how far they will take their diverse small business lending with the help of these new awards.”
About Wells Fargo
Founded in 1852 and headquartered in San Francisco, Wells Fargo & Company (NYSE:WFC) provides banking, investment and mortgage products and services, as well as consumer and commercial finance, through 7,800 locations, more than 13,000 ATMs, and the internet (wellsfargo.com). Wells Fargo’s vision is to satisfy customers’ financial needs and help them succeed financially. With approximately 259,000 team members, Wells Fargo serves one in three households in the United States. Wells Fargo & Company was ranked No. 26 on Fortune’s 2018 rankings of America’s largest corporations. In 2018, Wells Fargo donated more than $444 million to nearly 11,000 nonprofits in support of affordable housing, small business growth, financial education, and sustainability, among other community needs. For 10 consecutive years, Wells Fargo has held the honor of No. 1 in workplace giving by United Way Worldwide. Wells Fargo team members also make a difference by donating more than 2 million hours of volunteer time in the last year. News, insights and more information on the company’s corporate responsibility are available at Wells Fargo Stories.