First published in the Feb. 24 print issue of the Pasadena Outlook.
Wells Fargo announced a $20-million donation to help Los Angeles County small business owners own more of their businesses’ assets, including property and equipment. LISC LA (Local Initiatives Support Corporation, Los Angeles) will distribute the funding as a mix of grants and loans in the county, with a focus on diverse-led small businesses that have historically been underfunded.
The donation comes from Wells Fargo’s Open for Business Fund, a $420 million fund that the company created in July 2020 to help small businesses stay open during the COVID-19 pandemic. The fund has focused on racially and ethnically diverse small businesses across the United States, which have been disproportionately impacted by the pandemic. The fund was created from the gross processing fees that Wells Fargo made from administering Paycheck Protection Program loans in 2020. Wells Fargo has worked with Community Development Financial Institutions (CDFIs) and nonprofits across the nation to distribute funding.
“Fostering an inclusive economic recovery and helping small businesses persevere in the wake of COVID-19 is a priority for us,” said Charlie Scharf, Wells Fargo’s CEO, recently at a ceremony held at the Los Angeles Chamber of Commerce. “As a company, we have a commitment to make the communities where we operate stronger, and to do it at a very local level. Today’s donation is one of the largest we’ve made from the Open for Business Fund, and we know it will make a difference for small business owners here in Los Angeles.”
“Small businesses are the beating heart of our economy, which is why we’re committed to supporting them in recovering and building back stronger from the pandemic,” said L.A. Mayor Eric Garcetti. “Community partners like Wells Fargo are essential to this work and I look forward to seeing the difference this program will make for small businesses throughout our city.”
“When the pandemic hit two years ago, our small businesses were some of the first to take a hit. Some of our most beloved stores and restaurants were forced to adapt to our new reality of distanced shopping and outdoor dining. Some were forced to close their doors for good. This commitment to help support local and small businesses throughout Los Angeles will deliver critical assistance to businesses in need,” said Congresswoman Karen Bass, who is running for departing Mayor Garcetti’s seat.
“Program funds will help existing small businesses acquire assets such as property, equipment or technology, which will promote greater financial independence and help mitigate the effects of future economic shocks, which is especially important as we recover from this pandemic. I will always stand with the small businesses of this city. They are absolutely critical to our city’s success and I will always do whatever I can to ensure they flourish. COVID-19 continues to create major challenges and this investment couldn’t be coming at a better time.”
LISC LA, in collaboration with Inclusive Action for the City (IAC), will administer the $20 million grant in four ways:
- Acquisition Assistance: 0% interest, forgivable amount up to $500,000 per small business owner to help purchase property in business districts.
- Growth capital: Growth capital of up to $250,000 with longer than usual repayment terms, to help small businesses fill the “friends and family” financing gap and acquire key assets such as equipment and technology.
- Microloans: Low-cost, micro-loans up to $30,000 with interest rates capped at 3% to purchase assets.
- Grants: Cash grants of up to $5,000 for approximately 150 small businesses making $300,000 or less in annual revenue, to help smaller businesses return to thriving.
“Despite diverse small businesses being the cornerstone of Los Angeles’ economy, many remain undercapitalized and lack the support network for business growth,” said Tunua Thrash-Ntuk, executive director of LISC LA. “This incredibly generous gift from Wells Fargo will help LISC LA continue our efforts to close the racial wealth and opportunity gaps in our community and expand on our work to invest directly in diverse entrepreneurs and provide them with the necessary support they so often do not receive.”
Actor Anthony Anderson was on hand for the announcement and spoke to the local impact. “As someone whose father owned small businesses in Compton, I know first-hand how hard it is to run a small business,” he said. “The Open for Business Fund will help these businesses tremendously and help more dollars stay in our communities.”
Local small business owners interested in learning more about the program can find information lisc.org/los-angeles/abc-fund/. On a national basis, Open for Business Fund grantees are estimated to reach more than 152,000 small business owners, helping to maintain more than 255,000 jobs. Roughly 85% of small businesses served by grantees are projected to be Black, African American, Hispanic, Asian American, and Native American small business owners.
Wells Fargo also offers a Small Business Resource Center where entrepreneurs can explore business planning, financing considerations and practical advice.
