Building on a legacy of lifting up small businesses
As the world copes with the economic impact of COVID-19, Wells Fargo continues to invest in community organizations that offer U.S. small businesses access to capital and financial education.
For many of the 30 million U.S. small businesses, accessing capital was a major concern when the American economy was open and operating at full strength. Now, as they navigate the financial disruptions caused by the coronavirus pandemic, the need for cash-in-hand to pay employees, rent, and other bills has become critical for small business owners.
As COVID-19 forced state governments to shutter nonessential businesses and change the operating rules for many others, Wells Fargo began granting payment relief for small business customers up to 90 days, as well as implementing fee waivers, payment deferrals, increases to lines of credit for disaster relief, and other expanded assistance. The company also mobilized thousands of its employees to help small businesses and nonprofits through the Paycheck Protection Program, or PPP, the Small Business Administration’s emergency loan program.
As of May 31, Wells Fargo had submitted more than 226,000 PPP loan applications to the SBA for their review, with 85% of applicants having $2 million or less in revenue and 80% of them with fewer than 10 employees. The team continues to prepare PPP loan applications and then submit them to the SBA. (Wells Fargo will not retain any fees generated under the PPP.)
“We all need small businesses to survive this unprecedented time, because their success is intrinsically linked to livelihoods, local jobs, and community stability.” — Jenny Flores, head of small business growth philanthropy for the Wells Fargo Foundation
To help support the country’s most vulnerable communities, the Wells Fargo Foundation announced $175 million in donations to help address food, financial health, small business, and housing stability issues, and to provide help to public health organizations fighting to contain the spread of COVID-19.
“We all need small businesses to survive this unprecedented time, because their success is intrinsically linked to livelihoods, local jobs, and community stability,” said Jenny Flores, head of small business growth philanthropy for the Wells Fargo Foundation. “Since March, the Wells Fargo Foundation has accelerated more than $17 million in grants to 150 organizations serving diverse small businesses across the country.”
Recognizing the importance of local leadership and the unique needs of each community, Wells Fargo is directing some of this grant funding to support locally led initiatives. In Los Angeles, Wells Fargo has committed $1 million to a public-private small business relief fund, established by the County of Los Angeles. This funding will be deployed to Community Development Financial Institutions, or CDFIs, in collaboration with LA County and will provide grants to small businesses that may not otherwise qualify for federal disaster assistance. It will also provide critical technical assistance to help small businesses navigate through this crisis and be better prepared for future disasters.
Another grant recipient — Opportunity Fund, a national CDFI small business lender — was also awarded $1 million from the Wells Fargo Foundation. This money allowed nearly 1,000 of the nonprofit lender’s small business clients to skip a loan payment and use that money for immediate needs.
“Small businesses and their employees are affected more quickly and severely from a drop in consumer demand than large firms,” said Luz Urrutia, CEO of Opportunity Fund. “Help from our funders and investors is essential to ensuring we have the necessary resources to keep credit flowing to Main Street borrowers. Wells Fargo really stepped up.”
Wells Fargo’s financial support of Opportunity Fund and other CDFIs is representative of the bank’s goal to be the financial services leader in corporate citizenship by advancing opportunities for low- and moderate-income communities and diverse groups, noted Flores.
“Since March, the Wells Fargo Foundation has accelerated more than $17 million in grants to 150 organizations serving diverse small businesses across the country.” — Jenny Flores
“Mission-driven community lenders, like CDFIs, operate across the country providing business owners a financial lifeline with access to financing, paired with technical assistance,” said Flores. “These organizations were important resources for diverse-owned small businesses before COVID-19, but now their funding assistance may be an even better avenue for small companies navigating the current crisis. Going forward, Wells Fargo will continue to stand by CDFIs and other organizations to support programs and products that help ensure the long-term success of entrepreneurs.”
In 2015, Wells Fargo launched a five-year, $175 million Wells Fargo Works for Small Business®: Diverse Community Capital program to provide CDFIs with tailored investment and debt strategies that empower business owners from backgrounds that are underrepresented in the U.S., including people of color, immigrants, veterans, the LGBTQ community, people with disabilities, and others. To date, the program has helped more than 90 CDFIs make 124,000 loans and deliver 322,000 hours of technical assistance, enabling diverse entrepreneurs to sustain more than 183,000 jobs in rural and urban markets nationwide.
“Over the past 20 years, Wells Fargo has provided close to $1 billion in debt and grant capital for CDFIs, including those supporting small business,” said Vince Toye, group head of Community Lending & Investment. “Our Community Lending & Investment team supports more than 150 CDFIs of all sizes across the country with patient capital and lines of credit, allowing them to finance affordable housing, community facilities, and small and micro businesses in rural and urban communities.”
“Help from our funders and investors is essential to ensuring we have the necessary resources to keep credit flowing to Main Street borrowers. Wells Fargo really stepped up.” — Luz Urrutia, CEO of Opportunity Fund
With the ongoing support of Wells Fargo, these CDFIs are helping small business owners every day as they adapt and manage the challenges of our changed world. People like Opportunity Fund client Alicia Villanueva, owner of Alicia’s Tamales Los Mayas in Hayward, California. After her business lost its catering contracts when closures went into effect, the team at Opportunity Fund helped connect Villanueva with a local college preparatory school, where she is now providing 1,000 meals a week to 200 students. Villanueva was also one of the 1,000 Opportunity Fund clients who were able to skip a payment on their loans, thanks to the grant from Wells Fargo.
“This is a big help to me and my business right now,” Villanueva said. “We’re taking things day by day, and the support we’ve seen from so many people and organizations has been a shining light in the darkness.”