Wells Fargo & Co. is launching a $400 million fund to donate the fees it got from the Paycheck Protection Program back to small businesses, particularly ones that are minority-owned.
Through the new Open for Business Fund, Wells Fargo will work with nonprofits to provide “capital, technical support, and long-term resiliency programs to small businesses,” according to a statement Thursday.
The bank committed in April to donating all processing fees for arranging loans through the Small Business Administration’s program to help companies weather the economic impact of the coronavirus pandemic. The San Francisco-based lender had arranged more than 179,000 PPP loans through June 30, generating about $400 million in associated fees.
“If you think about who has really been hardest hit in this, it is the small-business community,” Mary Mack, Wells Fargo’s head of community banking, said in an interview. “Many of them rely on all of us being able to be out in our communities. They don’t have the same access and resources, they don’t have other sources of capital.”
The initial grant cycle -- open for applications through Aug. 7 -- will allocate $28 million to Community Development Financial Institutions serving racially and ethnically diverse small businesses, according to Wells Fargo’s statement. The firm will allocate the funds this year, next year and into 2022, Mack said.