The pandemic season was a terrible time for all of us. For business owners it was fraught with increased uncertain and anxiousness. During this time many larger companies, such as Wells Fargo used their resources to help business owners stay afloat and survive. To support small businesses during and after the COVID-19 pandemic, Wells Fargo launched the Open for Business Fund in 2020. This initiative, fueled by approximately $420 million in fees earned from processing Paycheck Protection Program (PPP) loans, has had a significant impact on local economies across the United States.
Economic Impact: Creating Jobs and Preserving Livelihoods
According to Wells Fargo, The Open for Business Fund has benefited more than 336,000 small businesses, leading to the creation or preservation of over 461,000 jobs nationwide. This massive effort targeted those hardest hit by the pandemic, with a focus on diverse and underserved communities:
- 79% of beneficiaries are racially or ethnically diverse business owners
- 53% are women-owned businesses
- 72% identify as low-to-moderate income individuals
The fund’s impact extended beyond immediate financial relief, providing over 1.1 million hours of technical assistance to small business owners, with more than half delivered in one-on-one sessions.
Tailoring Support to Individual Needs
JC Lofton Tailors, Washington D.C.
Julius “Eddie” Lofton, owner of a family tailoring business dating back to the 1930s, received a $10,000 grant through the Local Initiatives Support Corporation. This lifeline allowed him to keep his employees and maintain his family’s legacy during uncertain times.
Purple Orchid, South Florida
Sara Agudelo, owner of a smoothie and salad chain, received support through the Miami Foundation. The grant enabled her to purchase new equipment, transforming her business operations and allowing her to dream bigger – including plans to acquire commercial real estate for her growing enterprise.
Key Takeaways: A Roadmap for Future Small Business Support
The Open for Business Fund’s success has provided valuable insights for future small business support initiatives:
- Flexible capital is crucial: Allowing CDFIs and nonprofits to respond to unique community needs proved highly effective.
- Personalized technical expertise matters: One-on-one, culturally relevant assistance helped businesses adapt and grow.
- Innovation in capital access is essential: New loan products and expanded credit options reached more underserved entrepreneurs.
- Bridging the digital divide is critical: Online training helped businesses pivot to new customer service models and access resources.
- Leveraging grants can amplify impact: Grantees used Wells Fargo funding to secure additional support, resulting in a 7:1 leverage ratio.
Looking Ahead: Building Generational Wealth
The final phase of the Open for Business Fund, extending into 2025, focuses on helping small business owners in Atlanta, Charlotte, Houston, Los Angeles, and Miami build generational wealth through the acquisition of tangible assets like commercial property, equipment, and technology.
Charlie Scharf, CEO of Wells Fargo, emphasized the program’s broader impact:
“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.”
Charlie Scharf, CEO of Wells Fargo
By redirecting PPP fees into community support, Wells Fargo’s Open for Business Fund has not only helped small businesses weather the storm but has also laid the groundwork for their future growth and success. This initiative serves as a powerful example of how financial institutions can play a crucial role in supporting local economies and fostering resilience in times of crisis.
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