The company donates all processing fees from Paycheck Protection
Program to nonprofits helping entrepreneurs, minority-owned
businesses
Following an April 2020 industry-leading commitment to donate
all gross processing fees from the Paycheck Protection Program,
Wells Fargo unveiled today the details of an approximately $400
million effort to help small businesses impacted by the ongoing
COVID-19 pandemic keep their doors open, retain employees, and
rebuild. Through Wells Fargo’s new Open for Business Fund, the
company will engage nonprofit organizations to provide capital,
technical support, and long-term resiliency programs to small
businesses with an emphasis on those that are minority-owned
businesses.
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Through June 30, Wells Fargo funded loans under the PPP for more
than 179,000 customers, with an average loan amount of $56,000,
totaling $10.1 billion. Of the loans made, 84% of those are for
companies that have less than 10 employees; 60% were for amounts of
$25,000 or less; and, 90% of these applicants had $2 million or
less in annual revenue. Given the federal government’s extension of
the PPP, Wells Fargo will reopen its PPP loan application process
to eligible customers as soon as possible through a link in
Business Online Banking® or CEO®.
“By donating approximately $400 million in processing fees to
assist small businesses in need, Wells Fargo’s Open for Business
Fund creates opportunities for near-term access to capital and
addresses the road ahead to meaningful economic recovery,
especially for Black and African American entrepreneurs and other
minority-owned businesses,” said Wells Fargo CEO Charlie Scharf.
“Wells Fargo is committed to helping small businesses impacted by
COVID-19 stay open and get back to growth.”
According to data from Wells Fargo’s June Gallup/Small Business
Index, more than half of small business owners surveyed expect
either stagnant or decreasing revenues in the coming 12 months.
Accelerating small business recovery for communities in
need
The Open for Business Fund’s initial grants will allocate $28
million to Community Development Financial Institutions (CDFIs),
also known as nonprofit community lenders, aimed at empowering
Black and African American-owned small businesses, which are
closing at nearly twice the rate of the industry, according to the
National Bureau of Economic Research. Among the first grantees:
- Expanding Black Business Credit Initiative (EBBC) will support
the launch of the Black Vision Fund to increase the flow of capital
to Black-focused CDFIs for transformational work to close the
racial wealth gap in African American communities. The CDFIs will
also receive capital for urgent deployment to impacted businesses
in the Mid-Atlantic, Southeast, and Midwest.
- Local Initiatives Support Corporation (LISC) will provide
grants and low cost capital to more than 2,800 entrepreneurs with a
focus on preventing loss in revenue, sustaining employment, and
averting vacancies among vulnerable small business owners in urban
and rural markets nationwide.
“Black businesses have faced the largest shutdown of any diverse
group in the country,” said Ron Busby, Sr., CEO of U.S. Black
Chambers, Inc. “We lost 41%, or 450,000 Black-owned small
businesses, in this pandemic so far and all of those businesses
provided jobs so we need to accelerate an economic agenda that
helps them recover. The funding that Wells Fargo is putting back
into Black businesses and other minority-owned small businesses
across the country is truly going to be appreciated and will give
the kick start entrepreneurs need to continue and grow.”
Beginning today, the Open for Business Fund is accepting
applications from CDFIs and special purpose funds formed by CDFIs
serving racially and ethnically diverse small businesses for its
first grant cycle, open now through August 7. Additional grant
cycles focused on technical assistance and recovery and resiliency
will open later this year. Nonprofits can learn more at
www.wellsfargo.com/about/corporate-responsibility/community-giving.
Small business sentiment
The Small Business Index, which provides a quarterly pulse check
of sentiment from small business owners on their economic
situations and the wider economic landscape, highlighted higher
optimism on their financial outlook in June than in April. However,
this was still 19% lower than in January, prior to the outbreak of
COVID-19. In specifically oversampling African American, Hispanic,
Asian, and women business owners, June’s survey also observed that
52% of these owners felt the U.S. economy was in a recession or
depression, while 26% said they did not feel very prepared or at
all prepared for the economic downturn from the pandemic.
“June’s survey saw business owner optimism increasing as
reopenings have been getting underway, but the overall data shows
that for many, there’s still a long road to recovery,” said Mark
Vitner, chief economist at Wells Fargo. “The pandemic’s effects are
also still being sorted out as communities across the country are
in different stages of recovery, so optimism around indicators like
revenues and number of jobs will continue to shift as those stages
progress.”
Contributing to the small business ecosystem
Building a thriving small business sector has a lasting impact
on communities and on job creation. Since 2015, the $175 million
Wells Fargo Diverse Community Capital program has enabled more than
90 CDFIs to finance $1.6 billion in loans and offer 1.8 million
hours of training to diverse small business owners, which have
helped them sustain 195,000 jobs.
As part of the Diverse Community Capital program, the Wells
Fargo Foundation and the National Association of Latino Community
Asset Builders started the nation’s largest loan fund for
Latino-owned small businesses with a $10 million grant.
Separately, in March, Wells Fargo announced it aims to invest up
to $50 million in Minority Depository Institutions (MDIs) as part
of its commitment to support economic growth in African American
communities where MDIs, often community-based banks, provide
mortgage loans, small business lending, and other banking
services.
SmalI Business Index Methodology
Results for Wells Fargo/Gallup Small Business Index survey are
based on web interviews with 1,478 small business owners, conducted
during the period of May 29-June 5, 2020. This survey also included
an oversample of diverse segments — ensuring a minimum of 300
interviews each among African American, Asian, and Hispanic small
business owners. Beginning in second quarter 2019, the interview
process formally transitioned from outbound phone data collection
to a national small business web opt-in panel provider.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a diversified,
community-based financial services company with $1.98 trillion in
assets. Wells Fargo’s vision is to satisfy our customers’ financial
needs and help them succeed financially. Founded in 1852 and
headquartered in San Francisco, Wells Fargo provides banking,
investment, and mortgage products and services, as well as consumer
and commercial finance, through 7,400 locations, more than 13,000
ATMs, the internet (wellsfargo.com), and mobile banking, and has
offices in 31 countries and territories to support customers who
conduct business in the global economy. With approximately 263,000
team members, Wells Fargo serves one in three households in the
United States. Wells Fargo & Company was ranked No. 30 on
Fortune’s 2020 rankings of America’s largest corporations. News,
insights, and perspectives from Wells Fargo are also available at
Wells Fargo Stories.
Additional information may be found at www.wellsfargo.com |
Twitter: @WellsFargo. Video and b-roll footage can be found in the
Wells Fargo newsroom.
Cautionary Statement About Forward-Looking Statements
This news release contains forward-looking statements about our
future financial performance and business. Because forward-looking
statements are based on our current expectations and assumptions
regarding the future, they are subject to inherent risks and
uncertainties. Do not unduly rely on forward-looking statements as
actual results could differ materially from expectations.
Forward-looking statements speak only as of the date made, and we
do not undertake to update them to reflect changes or events that
occur after that date. For information about factors that could
cause actual results to differ materially from our expectations,
refer to our reports filed with the Securities and Exchange
Commission, including the discussion under “Risk Factors” in our
Annual Report on Form 10-K for the year ended December 31, 2019,
and in our Quarterly Report on Form 10-Q for the quarter ended
March 31, 2020 as filed with the Securities and Exchange Commission
and available on its website at www.sec.gov.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200709005489/en/
Media Jennifer Dunn, 202-303-2966
jennifer.g.dunn@wellsfargo.com @JenniferDunnWF
Manuel Venegas, 213-269-2723 manuel.venegas2@wellsfargo.com
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