The grant will support the launch of the Black Vision Fund to capitalize seven CDFIs and will provide $3.5M in immediate economic relief funding.
Wells Fargo awarded a $13.5M grant to the Expanding Black Business Credit (EBBC) initiative, a consortium that addresses the critical lending and wealth gaps faced by Black entrepreneurs and families in the U.S. The transformative donation will provide $10M in seed funding for a $78M Black Vision Fund.
The Fund will disburse loans and grants to help create economically vibrant and revitalized Black communities across the United States. EBBC will also enable its seven Community Development Financial Institution (CDFI) members to provide immediate support to Black-owned businesses in the Mid-Atlantic, Southeast, Deep South and Midwest regions that are distressed due to the coronavirus pandemic.
“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.”
CDFIs have a strong track record of providing capital and financial counsel to minority-owned small businesses and underbanked communities. Often, these community-based institutions, certified by the U.S. Treasury, step in when entrepreneurs are not able to access loans from traditional financial institutions. They foster growth for businesses, advance social mobility for families and spawn thriving communities.
“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.”
One key to closing the racial economic opportunity gap — and ending the persistent divide between Black and White Americans — is strengthening Black entrepreneurs, who play an outsized role in building stability and bolstering employment in Black communities. In 2019, 2.6 million Black-owned businesses supported 3.56 million jobs, generating $150 billion in revenue. Forty to 50% of the employees of these small businesses are Black.
Through its business, Wells Fargo supports more than 150 CDFIs of all sizes across the country, providing tailored investment and debt strategies to support CDFIs’ efforts in both rural and urban communities to finance affordable housing, community facilities and small and micro businesses.