Following an April commitment to donate all gross processing fees from the Paycheck Protection Program (PPP), Wells Fargo has unveiled 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.
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 fewer 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.
The Open for Business Fund’s initial grants will allocate $28 million to Community Development Financial Institutions (CDFI), 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.
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 through Aug. 7. Additional grant cycles focused on technical assistance and recovery and resiliency will open later this year.
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