Wells Fargo Diverse Community Capital Program

  • Three-year capital program for CDFIs who lend

  • to diverse-owned small businesses.

 

Overview

Wells Fargo LogoIn November 2015, Wells Fargo launched the Wells Fargo Works for Small Business®: Diverse Community Capital (DCC) program. Through the three-year program, Wells Fargo will distribute $50 million in debt (lending) capital and $25 million in grant capital to CDFIs that are expanding lending to diverse small businesses, with a priority focus on African-American businesses.

DCC funds are intended to be utilized by CDFIs to lend to diverse small business owners, support initiatives that increase access to capital and resources (such as technical assistance, marketing, outreach), and help more diverse small business owners get the coaching and education resources they may need. The program also has a social capital component, focused on activities to build effective support networks and social infrastructure among CDFIs for the purpose of increasing lending to diverse small businesses. Wells Fargo is collaborating with Opportunity Finance Network to execute certain aspects of the program.

There will be two rounds of applications each year over the course of the program. For more information, including program guidelines, application details, and an instructional webinar, please visit the Wells Fargo website.

Success Stories

Main Street Launch Propels a Restaurateur to New Growth

For eight years Tanya Holland, owner of Brown Sugar Kitchen, has grown her restaurant in a disinvested community in Oakland, CA. As a business owner, it has been her personal mission to hire and train employees within the community, serving a vital role as a leader and role model for how others in the community can start and grow successful community-based businesses.

Yet throughout the business growth, Tanya has faced anemic cash flow performance, taken on high-dollar loans, and struggled with a limited inventory as a result of a lack of affordable working capital. So when she approached Main Street Launch (formerly OBDC Small Business Finance) for help with her business, the CDFI immediately recognized that in addition to providing financing, they could support Tanya with one-on-one coaching.

“We helped Tanya by working through her business plan with her, and counseled her on cash flow management, and developing a financial projection lens,” said Robert Lattimore, Senior Vice President of Main Street Launch.

In addition to providing technical assistance, Main Street Launch—a recent Wells Fargo Diverse Community Capital award recipient—provided a $203,000 term loan that met all of her major business needs. “We refinanced high-interest business loans, which improved her cash flow by 25 percent. The working capital we provided facilitated the hiring of five new employees, and added inventory capacity to support anticipated growth in sales revenue,” said Lattimore.

By working with Main Street Launch, Tanya’s business is now more prepared for growth. “Going forward, we agreed to work together to work together to build business relationships with local banking institutions that can meet the future needs of her restaurant business,” explained Lattimore. “Her success empowers us all!”

Impact Stats:

  • Five (5) Jobs projected
  • Twenty (20) Jobs preserved
  • $203,000 of Lending
  • Delivery of Development Services for:
    1. Business Planning,
    2. Cash Management
    3. Financial Projections.
  • African American Business
  • Women Owned Business
  • Enterprise Zone Business
  • Hub Zone Business

Hope Enterprise Helps Build Brighter Futures with Bilingual Immersion

For more than ten years, Kim Palmer has provided access to affordable, quality language immersion programming for infants and toddlers through Bilingual Academy Memphis (BAM). As Kim puts it, her own son’s experiences were the inspiration for the educator to open her own bilingual center, “My son’s godparents are from Chile and Costa Rica. They taught him Spanish at an early age.” Through this experience, she explains, “I saw the need for everyday people to be able to afford for their children to learn a second language.” So in 2005 she opened BAM to serve a need of providing access to bilingual immersion. But rent was an ever increasing problem for keeping costs affordable, so in 2015 she was set out to purchase the property she had rented for years.

“One of the biggest obstacles for us was trying to get financed. Being a small business with one owner, it was difficult. HOPE provided us with necessary funds to purchase the building, which saves us from paying the additional fees we were paying, including rent, insurance, and other costs. It also locks us into a loan at an affordable rate,” said Kim.

With HOPE’s assistance, BAM purchased the land and the building that they had previously leased. Their location in their community is a treasured resource. As the Hispanic population in Memphis has more than doubled in the last decade, BAM plays a meaningful role for Spanish-speaking families. As Kim puts it, “To be able to bring their children here and be able to communicate with staff, this is very important.” All the staff at BAM speak Spanish and English. She currently has ten teachers and caregivers on staff, and they all receive additional training in partnership with the Department of Human Services and other community resources to help them further their education.

The site has a maximum capacity of 97 children. As their current enrollment is 75, there is room to grow, and they plan to add three more staff positions in the future.

BAM was one of the first projects closed through the Wells Fargo DCC. Through the program, HOPE received a $2 million grant to expand its financing activities for minority- and women-owned businesses. The investment in BAM supported through this project will both create additional employment opportunities and additional slots in its bilingual immersion program.

Pacific Community Ventures Connects Entrepreneur to Captial

Chef Reign Free, of Red Door Catering, has called the kitchen her home since she was nine, when she first watched her mother cooking traditional West Indian dishes for her family. As an entrepreneur today, Reign pushes to continually improve Red Door Catering’s customer service, community consciousness, and innovative cuisine.

However, when Reign and her partner Steve Rubin were ready to grow the business, they found it difficult to access capital. Although the business had been in operation for years, it was not a full-time venture. Fortunately, Reign was referred to Pacific Community Ventures (PCV). 

PCV connected Reign to free mentoring through PCV’s BusinessAdvising.org program. Reign gained financial coaching to help her with financial record keeping, as well as loan applications. In addition, she secured a loan from PCV, which has not only helped her reach a larger customer base but also bring on 10 new staff members.

Working with Reign was a no brainer for PCV. Red Door Catering is a business that not only supports other local businesses by sourcing ingredients from local farmers and producers, but it’s also deeply invested in the community. The business hires from lower income communities in the area, creating quality jobs with great benefits. And it also makes contributions to reduce violence in the city and provide yearly grants to support organizations that offer services to hard-to-reach youth and displaced women.

“Working with the DCC group helps us gain insights to drive more capital to diverse small business owners in the Bay area, specifically in Alameda and Contra Costa counties,” said Robert Porter, Managing Director of Small Business Lending at PCV. “In these areas, small businesses owned by African Americans and Latinos are some of the fastest growing, creating jobs that are critical for our communities. Funding through the DCC program has helped us reach more of these businesses who might otherwise not have access to the capital needed to continue in their growth.”

Impact:

Red Door is on track to create 10 new jobs in their first year alone of working with Pacific Community Ventures!

Carolina Small Business Development Fund Steps Up for "A Step Above" Cleaning Services

Jimmy Price, small business owner and entrepreneur, has a good character, integrity, honesty, and a quality work ethic developed over the years as he worked for large hotels and cleaning companies that serviced other businesses. So he was prepared for hard work when he started A Step Above Cleaning Service. What he was not prepared for was a small business loan. For that step, he worked with Carolina Small Business Development Fund (CSBDF) to identify his business needs and create a plan of action targeted at developing a strong financial base.

Once he was ready, Jimmy applied for a working capital loan and equipment financing from CSBDF. He also received money for debt consolidation. Because Jimmy was unable to get financing early on, he was using high-interest rate options. The working capital provided a cushion Jimmy needed to make payroll and establish liquidity in his business. The loan also allowed him to take on more 1099 contract workers to help meet the needs of his growing list of clients in residential and business properties.

“Joe has been a steady source of encouragement and guidance,” stated Jimmy about Joe Battle, Business Services Director at CSBDF. “He demonstrated so much patience and determination in assisting me in addressing my challenges in running a healthy business.”

With support from its DCC award, CSBDF financed a portion of business training Jimmy and his wife Margie Price received from a local financial advisor.

“The support I am receiving gives me the opportunity to feel comfortable about taking on larger projects. I am now better able to understand my brand," said Jimmy. "Thanks to CSBDF, I have the resources I need to grow my business."

Impact:

1 job preserved, 1 job created

Borrower Success Story Uploader

Wells Fargo DCC Program awardees are asked to provide borrower success stories that illustrate the impact of lending in your CDFI’s community. OFN will be working with awardees to develop these stories, which may be used in the media or on social and online properties run by Wells Fargo and/or OFN. Please fill out the form below as completely as possible.

Please note that the information you provide is the basis for a story we may or may not decide to use, and that we will not use it without your review and approval.

(Note: Loan should have happened after you signed the agreement for the DCC Program)
(e.g. start-up capital, seasonal capital, construction loan, equipment financing, etc.)
(e.g. Share how you helped. What’s distinctive about the loan/borrower? Why did the borrower choose your CDFI? What loan product or services did you offer?)
(e.g. How many jobs were created/preserved?)
Files must be less than 2 MB.
Allowed file types: gif jpg jpeg png bmp eps tif pict psd doc docx odt zip.
If you have not secured permission, we will contact you to discuss.
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