Wells Fargo Donates $ 8.5 Million to Chicago Small Business Takeover
âAt the onset of the pandemic, Wells Fargo recognized that women and various businesses were shutting down at higher rates and that more capital would be needed to support them,â said Mark Lester, senior vice president and head of relations at Chicago in Wells Fargo. government and institutional banking division.
In Chicago, Wells Fargo gave $ 2 million each to Allies for Community Business, the Chicago Community Loan Fund and the Community Investment Corporation, $ 464,000 to the Greater Chatham Initiative and $ 2.1 million to Greenwood Archer Capital.
Brad McConnell, CEO of Allies for Community Business, said a $ 2 million grant from Wells Fargo enabled the community lender to offer lower interest rates on its loans. With an office in East Garfield Park at the hatchery, a food and beverage incubator, Allies for Community Business provides loans and other services to businesses in Illinois and Indiana owned by black entrepreneurs, Latino, female and low income.
Last year, the organization loaned and granted approximately $ 400 million to more than 22,000 community businesses, and will lend and grant approximately $ 325 million by the end of 2021, McConnell said. Individual loans range from $ 500 to $ 100,000 and borrowers tend to pay them back within two years. Average interest rates are 9%, with a closing rate of 1%, but with new funding from Wells Fargo, Allies for Community Business will provide 3% interest rates for the remainder of 2021, said McConnell.
âThe companies we seek to serve are the ones that have been hit hardest by the pandemic,â said McConnell. These mainly include restaurants, bars and venues, he said. âIt’s really hard for businesses to be able to take out credit when income is so uncertain.
Tyrone Green, owner of Penson & Green Security in Chicago’s Englewood neighborhood, used a $ 2,500 loan from Allies for Community Business to cover the payroll and uniforms of his 10 employees.
âThe loan I received from (Allies for Community Business) helped me get what I needed to get the business back on track, full steam ahead,â Green said in a statement.
The Greater Chatham Initiative is using the funding to launch a third FoodLab program, which aims to grow South Side restaurants. GCI, founded in 2016, provides assistance to Avalon Park, Auburn Gresham, Chatham and Greater Grand Crossing.
âWe decided to focus on the food companies because there was a need for technical assistance,â said Nedra Fears, Executive Director of GCI.
During the COVID-19 pandemic, GCI has helped local restaurants go digital to offer online ordering and delivery. GCI also provides educational resources to restaurateurs on business fundamentals and profit strategies and connects them with available grants and loans.
Former cohort members saw their membership increase by 36%, with some members seeing their incomes increase by up to 63%, according to GCI data. Program restaurants include Harold’s Fried Chicken at 407 E. 75th St., the Woodlawn site at 1200 E. 79th St., and Mabe’s Deli at 312 E. 75th St.
Wells Fargo, which employs 3,100 people in Illinois, is not the only major bank to have recently awarded grants to community funds and organizations. Last week, PNC Financial Services donated $ 1.5 million to help launch the Community Micro Equity Fund, which connects 200 business owners and skilled entrepreneurs with equity investments of up to $ 25,000. .
âI think the financial community and the big banks are urged to step up,â Lester said. “We hope that the money will be used and help to ensure some stability and growth for these organizations.”