Wells Fargo has launched a new philanthropic initiative called the Open for Business Growth program, committing $20 million to support small businesses across the United States. The program aims to provide essential resources and funding to entrepreneurs who are ready to scale their operations, particularly those in the underserved "missing middle" of the small business sector.

Key Takeaways

• $20 Million Commitment: Wells Fargo’s new program focuses on providing grants to nonprofits that support small business growth.
• Targeting the "Missing Middle": The initiative aims to assist small businesses that are poised for expansion but lack access to traditional financing.
• First Recipient: Allies for Community Business in Chicago is the first organization to receive funding, focusing on the construction industry and businesses with fluctuating revenues.
• Job Creation Potential: The program is expected to help generate approximately 260 local jobs through the support of small businesses.

Overview of the Open for Business Growth Program

The Open for Business Growth program is designed to address the unique challenges faced by small businesses that are not quite large enough to qualify for traditional financing options. Darlene Goins, head of Philanthropy and Community Impact at Wells Fargo, emphasized the importance of reaching these businesses, stating, "Small businesses on the brink of expansion are poised to make an even greater impact in creating jobs, increasing services, and strengthening the economy."

This initiative builds on the success of Wells Fargo’s previous $420 million Open for Business Fund, which provided critical support to approximately 336,000 small businesses during the pandemic, helping them retain or create over 461,000 jobs nationwide.

Focus on Chicago

The program will initially launch in Chicago, with plans to expand to other markets in the coming year. Allies for Community Business, a nonprofit organization that provides capital, coaching, and connections for entrepreneurs, has been selected as the first recipient of the Open for Business Growth grant.

With a grant of $2.5 million, Allies for Community Business will implement a new revenue-based financing model aimed at supporting businesses in the construction sector and those with variable revenue streams, such as restaurants and retail shops. This innovative approach allows for flexible repayment options that adjust according to the business’s revenue fluctuations.

Impact on Local Communities

Brad McConnell, CEO of Allies for Community Business, highlighted the significance of this funding, stating, "Many small businesses need more than a microloan but are not yet large enough for traditional financing. We are offering creative capital that does not dilute the entrepreneur’s ownership."

The organization estimates that the support from Wells Fargo will enable its clients to secure larger contracts and opportunities, ultimately leading to the creation of around 260 local jobs. This job creation is crucial for revitalizing communities and fostering economic growth in the region.

Conclusion

Wells Fargo’s Open for Business Growth program represents a significant investment in the future of small businesses, particularly those that are often overlooked in traditional financing models. By providing targeted support and resources, Wells Fargo aims to empower entrepreneurs to achieve their growth potential, thereby contributing to stronger local economies and job creation across the United States.

Sources

• Wells Fargo Launches $20 Million Open for Business Growth Program, Business Wire.