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Wells Fargo has created a $400 million fund to donate fees it collected from the Paycheck Protection Program to minority-owned small businesses.
The bank's Open for Business Fund aims to work with nonprofit organizations "to provide capital, technical support, and long-term resiliency programs" to these and other entrepreneurs, it said Thursday.
Through June 30, Wells Fargo has processed close to 180,000 PPP loans tied to some $400 million in fees; the average loan size is $56,000.
The fund's initial grants include some $28 million in support for Community Development Financial Institutions, which specifically works with Black and African American-owned small businesses. These firms are closing at almost twice the rate of the broader industry, according to the National Bureau of Economic Research.
Wells Fargo's June Gallup/Small Business Index finds that over half of small business owners polled expect either stagnant or decreasing revenues in the next 12 months.
"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," according to Ron Busby Sr., CEO of U.S. Black Chambers. "The funding that Wells Fargo is putting back into Black … and other minority-owned small businesses across the country … and will give the kick start entrepreneurs need to continue and grow."
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