“The impacts of COVID-19 have shone another spotlight on the systemic inequalities that small businesses and communities of color continue to face,” said Ellis Carr, President and CEO of Capital Impact Partners and CDC Small Business Finance. “We are thrilled to have the leadership and support of Wells Fargo and their Open for Business program as we work with these incredible entrepreneurs to surface the solutions they need to help their communities thrive.”
The need for such technical assistance for small business entrepreneurs of color is dire. A number of key findings by the Small Business Credit Survey 2021 Report on Firms Owned by People of Color included:
- Firms owned by people of color reported more significant negative effects on business revenue, employment, and operations as a result of the COVID-19 pandemic.
- Firms owned by people of color were more likely to report that they reduced business operations in response to the COVID-19 pandemic.
- At the time of the survey, firms of color were more likely than white-owned firms to report poor or fair financial conditions.
- Ninety-two percent of Black-owned firms reported experiencing financial challenges in 2020 (up from 85% in 2019)
- Black business owners were the most likely to tap into their personal funds in response to their firms’ financial challenges
“The Open for Business Fund enlists the care and expertise of organizations like Capital Impact Partners to urgently assist the small business community and to help navigate entrepreneurs back to growth,” said Anna Bard, Senior Vice President, Social Impact and Sustainability at Wells Fargo . “Small business owners inspire us with their resilience. It is incumbent on all of us to help enable an inclusive economic recovery for these entrepreneurs and the neighborhoods they support.”
As traditional tools and approaches have failed to address systemic issues of inequality and the widening racial wealth gap, there is a recognition for new solutions. Capital Impact Partners and CDC Small Business Finance formally joined their operations to launch a transformative new enterprise and innovate how capital and investments flow into historically disinvested communities. The goal of this new enterprise is to help ensure that traditional and mainstream financial systems are equitably serving communities of color to drive solutions that support economic mobility and wealth creation.
The support from Wells Fargo’s Open For Business program is a key investment in that shared vision. For small businesses facing financial hardships and other business challenges, having access to trusted experts to help grow their businesses and realize locally led solutions is critical to getting back to growth.
While Capital Impact will manage the overall program, CDC Small Business Finance will deliver TA and create specialized curriculum for Washington, D.C. metropolitan area participants and alumni of Capital Impact’s Equitable Development Initiative.
They will also lead knowledge sharing with City First Enterprises, Hope Enterprises, and Wacif, for entrepreneurs in the Washington, D.C. Metropolitan region as well as the Mississippi Delta on the following: initiatives:
- City First Enterprise will launch a formal small business TA program including hiring two business advisors. Training will include modules such as credit repair that will help small businesses recover from the impacts of the economic crisis.
- Hope Community Enterprises will scale and improve efficiencies to their SBA lending with a focus on using the Community Advantage Program to serve entrepreneurs of color in the rural Deep South.
- Wacif will provide legacy businesses interested in employee ownership with technical assistance including individualized growth plans, technology, marketing, and financing.
In turn, CDC will learn more about how to utilize their deep community experience of each of these organizations to support the tailored needs of entrepreneurs in these geographic regions.
Small business owners looking for support can visit wellsfargo.com/together for tips and ideas.
About Capital Impact
Through capital and commitment, Capital Impact Partners helps people build communities of opportunity that break barriers to success. We work to champion key issues of equity and social and economic justice by deploying mission-driven financing, capacity-building programs, and impact investing opportunities.
A nonprofit Community Development Financial Institution, Capital Impact has disbursed more than $2.5 billion since 1982. In 2020, Capital Impact launched a new enterprise with CDC Small Business Finance under one leadership team and national strategy to reinvent traditional and mainstream financial systems. Our goal is to ensure these systems equitably serve communities of color to drive community-led solutions that support economic mobility and wealth creation.
Our leadership in delivering financial and social impact has resulted in Capital Impact being rated by S&P Global and recognized by Aeris for our performance. Headquartered in Arlington, VA, Capital Impact Partners operates nationally, with local offices in Austin, TX, Detroit, MI, New York, NY, and Oakland, CA.
About Wells Fargo
Wells Fargo & Company is a leading financial services company that has approximately $1.9 trillion in assets, proudly serves one in three U.S. households and more than 10% of small businesses in the U.S., and is the leading middle market banking provider in the U.S. We provide a diversified set of banking, investment and mortgage products and services, as well as consumer and commercial finance, through our four reportable operating segments: Consumer Banking and Lending, Commercial Banking, Corporate and Investment Banking, and Wealth & Investment Management. Wells Fargo ranked No. 37 on Fortune’s 2021 rankings of America’s largest corporations. In the communities we serve, the company focuses its social impact on building a sustainable, inclusive future for all by supporting housing affordability, small business growth, financial health, and a low-carbon economy. News, insights, and perspectives from Wells Fargo are also available at Wells Fargo Stories.
SOURCE Capital Impact Partners