Well's Fargo Donates $13.5M Grant to Expanding Black Business Fund

On Tuesday, Well's Fargo reported that it would support the launch of the Black Business Fund to capitalize on seven CDFIs and award $13.5M grants to Expanding Black Business Credit (EBBC) initiative. The initiative was set up to address the critical lending gap between white-owned businesses and black-owned businesses. The goal of the initiative is to provide immediate capital relief for black businesses. Based on this, it would focus on giving out loans and grants to Black-owned businesses across the United States.

A tweet by the initiative reads

#CDFIs have a strong track record of providing capital to minority-owned small businesses. We are inspired by the launch of the #BlackVisionFund, supported by @WellsFargo, and applaud the leadership of the Expanding Black Business Credit (EBBC) initiative.

EBBC would allow seven members from the Community Development Financial Institution (CDFI) to provide immediate support to black-owned businesses that are worst hit by the ongoing ravaging coronavirus pandemic. The supports would cut across black-owned businesses in areas like Southeast, Mid-Atlantic,  Deep South, and Midwest regions.

“This grant from Wells Fargo will help to accelerate the expansion of economic opportunity for Black communities,” said Bill Bynum, chair of the EBBC and CEO of Hope Enterprise Corporation. “In these unprecedented times, when trillions of dollars are being invested in economic stimulus, we must proactively invest in Black-owned businesses to prevent further widening of — and, eventually, close — the centuries-old racial wealth divide.”

CDFI would be included in the initiative because it has a strong track record of providing immediate financial support to minority-owned businesses and underdeveloped communities. Most times, the group steps in when minority businesses are unable to get financial support from traditional banks.

“We are proud to partner with the Expanding Black Business Credit initiative to provide resources for Black-owned small businesses and Black communities, especially in this pivotal moment for our country,” said Jenny Flores, head of small business growth philanthropy at Wells Fargo. “CDFIs play an integral role in meeting necessary capital needs in communities that have the greatest promise and potential. By donating the gross processing fees from the Paycheck Protection Program back to the small business community, we aim to offer grants like this one as a catalyst for economic recovery, especially for those hardest hit by the pandemic.”

The black business initiative was created because one of the effective ways to tackle the economic-financial gap between whites and blacks in the United States is to provide financial support to black entrepreneurs. With this, the entrepreneur would contribute their quota in building the black-owned community. Also, making financial support available for black entrepreneurs would provide more business opportunities for unemployed blacks. For instance, in 2019, 2.6 million Black-owned businesses supported 3.56 million jobs, generating $150 billion in revenue. More than 40% of the employees of these small businesses are Black.

A report revealed that Well's Fargo has supported more than 150 CDFIs in its programs across the country. The company has helped provide investment and debt strategies to support CDFI effort in both rural and urban communities.

About Expanding Black Business Credit (EBBC)

EBBC was formed in January 2016. The goal of the initiative is to provide a thriving business ecosystem for black-owned businesses. Empowering the black entrepreneurs with financial support and management education triggers growth and economic stability in black communities. 

To achieve this, the initiative leverages its collective power to reduce the different financial barriers faced by black-owned businesses. It provides money, management education, and markets for black-owned businesses.

The seven Black-led/focused CDFIs are to support the initiative and ensure that it achieves its mission. These seven CDFIs include Black Business Investment Fund, City First Bank, Community First Fund Pennsylvania, Hope Enterprise Corporation/Credit Union, MEDA, National Community Investment Fund, and Texas Mezzanine Fund.

About Well's Fargo and Company

Wells Fargo & Company (NYSE: WFC) was founded in 1852 and headquartered in San Francisco. The company provides banking, investment and mortgage products, and services, as well as consumer and commercial finance, through 7,400 locations. The company has more than 13,000 ATMs, the internet (wellsfargo.com), and mobile banking. It currently has offices in 31 countries and territories.

The company's vision is to satisfy its customers and help them achieve their financial goals. It currently has about 263,000 team members and serves at least one in three households in the United States.

In the Fortune’s 2020 rankings of America’s largest corporations, Wells Fargo & Company (NYSE: WFC) ranked no 30.