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.

Awardees

  • Access to Capital for Entrepreneurs, Inc. (ACE) - Atlanta, GA
  • Accion Chicago - Chicago, IL
  • Accion East - New York, NY
  • Accion serving Arizona, Colorado, Nevada, New Mexico and Texas - Albuquerque, NM
  • Accion serving Imperial, Riverside, San Bernardino and San Diego counties, CA
  • African Development Center (ADC) - Minneapolis, MN 
  • AmPac Tri-State CDC - Grand Terrace, CA
  • Ascent Funding - Portland OR
  • Black Business Investment Fund Florida (BBIF) - Orlando, FL
  • Bridgeway Capital Inc. - Pittsburgh, PA
  • Business Center for New Americans - New York, NY
  • California FarmLink - Santa Cruz, CA
  • Carolina Small Business Development Fund - Raleigh, NC
  • Coastal Enterprises Inc. - Brunswick, ME
  • Community Investment Corporation (CIC) - Chicago, IL
  • Community First Fund - Lancaster, PA
  • CommunityWorks - Greenville, SC
  • Cooperative Business Assistance Corporation (CBAC) - Camden, NJ
  • Craft3 - Ilwaco, WA
  • Economic and Community Development Institute (EDCI) - Columbus, OH
  • ECDC Enterprise Development Group - Arlington, VA
  • Forward Community Investments, Inc. - Madison, WI
  • Four Bands Community Fund - Eagle Butte, SD
  • Fresno CDFI - Fresno, CA
  • Hope Enterprise Corporation - Jackson, MS
  • Initiative Foundation - St. Cloud, MN
  • Justine PETERSEN - St. Louis, MO
  • Latino Economic Development Center LEDC - D.C. & Baltimore, MD
  • LiftFund - San Antonio, TX
  • Local Enterprise Assistance Fund (LEAF) - Brookline, MA
  • Main Street Launch - Oakland, CA
  • Metropolitan Economic Development Association (Meda) - Minneapolis MN
  • Micro Enterprise Services of Oregon (MESO) - Portland, OR
  • Montana & Idaho CDC - Missoula, MT
  • Nebraska Enterprise Fund - Oakland, NE
  • Northern Initiatives - Marquette, MI
  • Northwest Native Development Fund - Nespelem, WA
  • Natural Capital Investment Fund, Inc. (NCIF) - Shepherdstown, WV
  • Opportunity Fund - San Jose, San Francisco, Los Angeles, CA
  • Pacific Coast Regional Small Business Development Corporation - Los Angeles, CA
  • Pacific Community Ventures - San Francisco, CA
  • PathStone Enterprise Center - Rochester, NY 
  • Pathway Lending - Nashville, TN
  • PIDC Regional Development Corporation - Philadelphia, PA
  • Prestamos CDFI, a subsidiary of Chicanos Por La Causa - Phoenix, AZ
  • San Diego Region Small Business CDC - San Diego, CA
  • Self-Help Ventures Fund - Durham, NC
  • South Carolina Community Loan Fund - Charleston, SC
  • Southern Bancorp Community Partners - Little Rock, AR
  • Tampa Bay Black Business Investment Fund - Tampa, FL
  • UCEDC - Cranford, NJ
  • VEDC - Van Nuys, CA
  • Ventures - Seattle, WA
  • Working Solutions - San Francisco Bay Area, CA
  • WomenVenture - Minneapolis, MN
  • WWBIC, The Wisconsin Women's Business Initiative Corporation - Milwaukee, WI

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

Ascent Funding Helps Growing Small Business Seize Prime Opportunity

“My business, like most young businesses, had limited financial resources, so I was limited in the number of projects I could perform,” said Tyrone Bailey, owner of Bailey’s Construction. Bailey launched his trucking and hauling business in 2012 after years in the industry. As his reputation grew, he began receiving more offers to become the prime sub-contractor for many projects. This meant he needed the working capital to cover costs—like fuel and labor—up front while waiting 30-45 days for customers to pay for the work. On top of that, he was looking to grow, but was unable to secure affordable financing from a bank due to a low credit score.

Bailey approached Ascent Funding (formerly Albina Opportunities Corporation), a CDFI based in Portland, Oregon, and recent DCC recipient. Ascent Funding, which provides under-banked and underserved business entrepreneurs access to capital, extended both a line of credit and an equipment term loan to Bailey’s business. The line of credit provides Bailey’s Construction with additional working capital, and the term loan will enable Tyrone to expand his fleet.

“Together, both credit facilities will provide Bailey’s Construction with the ability to significantly expand his business,” said Robin Wang, Executive Director of Ascent Funding.

In addition to providing the capital, Ascent Funding’s Business Advisory Services is working with Tyrone to improve his financial management skills and credit history so this growing business can one day secure traditional bank financing.

Funding from their DCC award helped Ascent Funding in their work with businesses like Bailey’s. “DCC has been a tremendous resource for us,” Wang said. “Not only because it provided critical financial support to help us fulfill our mission, it has also enabled us to collaborate, learn, and engage with peers from around the country."

Impact:

  • 3 Jobs Retained
  • Fleet expansion
  • Technical Assistance to build credit and gain access to traditional financing

EDG Steps in to Boost a Small Businesses Poised for Growth in Baltimore

For many growing businesses, raising capital to meet growth needs is demanding. When there is a negative cash flow, traditional banks are often not willing to lend, even when the cash flow is due to rapid sales growth. So it was fortuitous for Andrew Buerger, founder of B’more Organic when, in 2014, ECDC-Enterprise Development Group (EDG) reached out to see if the certified B-corporation was looking for funding.

Andrew and his wife Jennifer founded B’more Organic, a skyr-like organic, no sugar added, strained yoghurt smoothie, after a life-changing moment in Andrew’s life. His father died of heart disease at only 58, and it caused him to examine his own lifestyle. “I was 31 years old. At that time, I was about 20 pounds overweight—already taking statin drugs at age 25. I just kind of thought that was my fate as well.” He decided to overhaul his diet and in the process discovered skyr, an Icelandic style of yogurt.

From there, B’more Organics was born, with Andrew and Jennifer developing a healthy and sustainable yogurt by partnering with locally sourced dairy, ensuring their product is sustainable as well as great-tasting and organic. And as a B-corporation, they also donate one percent of their sales to Jodi’s Climb for Hope, which funds MS and breast cancer research. This mission-driven approach was a perfect fit for EDG’s goal to not only help businesses move toward self-sufficiency and have a positive impact on their communities along the way.

The initial outreach to B’more Organic in 2014 enabled the small company to grow, so that when they were ready to expand in 2016, their trusted partner EDG was right there with them to provide the necessary microloan. This capital has allowed B’more Organic to expand their geographic reach into more retail outlets. 

As a Wells Fargo Diverse Community Capital (DCC) recipient, EDG is poised to make a greater impact on impactful small businesses like B’more in Baltimore, “DCC funding has enabled us to open and staff an office in Baltimore and also share an office space in Baltimore. Both offices have significant traffic from small business owners. Although EDG began serious outreach in the Baltimore-metro area in 2010, we were not able to make a significant impact on the small business market until we acquired this award,” said Eric Loewe, loan and technical assistance manager at EDG.

Impact:

  • 2 Full Time jobs preserved
  • 2 Full Time jobs created in Baltimore, MD
  • 6 Full Time manufacturing jobs created in New York state
  • Expansion and growth into new markets, now available nationally

MICDC Helps Eva Bowman Start Up after a Set Back

After Eva Bowman’s husband suffered a series of strokes last year, leaving him permanently disabled, Eva decided it was time to start her own business to provide for her family. Despite her skills as a passionate sales person with strong insurance industry experience, she was unable to obtain traditional bank financing for her start-up insurance and financial planning agency.

When she started looking for other sources of capital, Eva connected to Montana & Idaho CDC (MICDC) via the Small Business Administration’s LINC program. MICDC recognized Eva had the natural tools and skills to build a successful business, she merely lacked capital.

To set her on the path to success, MICDC provided Eva with help creating financial projections and finding the business’ break-even point. Then, MICDC provided $20,000 of collateral support to enable Eva to access a $60,000 MICDC SBA Community Advantage guaranteed loan.

Now, Eva’s fledgling business is poised for success. Eva will hire three employees, including at least one bilingual staff member, to better provide services to the local Hispanic community. She is setting up shop in Caldwell, Idaho, where one-third of the residents are Hispanic or Latino, and Eva’s business will provide bilingual access to insurance products for the whole community.

Additionally, Eva will continue to work with MICDC’s client success team, first receiving support setting up QuickBooks for the new business. MICDC’s business advisors will also help Eva track progress toward her financial goals, with a target of transitioning to bank financing in approximately two years. Most importantly, as a business owner with strong support, Eva will feel more secure in her ability to take care of her family.

Supporting burgeoning businesses like Eva’s is possible through MICDC’s recent Wells Fargo Diverse Community Capital (DCC) award, which enabled MICDC to create a collateral support program for Hispanic borrowers in Idaho and focus on the Hispanic community. As a result, MICDC has created a deeper community outreach strategy with lots of new referral sources. “DCC funding has helped us see how we can do more in the communities we serve,” said Betsy Beauvais, MICDC Director of Lending. 

Impact:

  • Four jobs projected
  • $20,000 of collateral support to access a $60,000 MICDC SBA loan
  • Delivery of Development Services for: business planning, cash management, financial projections, and path to bankability

Pathway Lending Positions APS Facility Maintenance on the Path to Success

Lorenzo Myrick’s role as an entrepreneur began when he left his long-time job in corporate finance to launch APS Facility Maintenance. “I started this business with a cell phone and a briefcase,” said Myrick. “I did my first interviews in my mom’s restaurant.” As his business grew, he saw an opportunity to evolve the business to a full-service facility maintenance and landscaping provider. But for this growth, he needed capital and confidence.

With the help of Pathway Lending, a DCC recipient, APS secured two term-loans and a line of credit, allowing them to bid differently and invest in technology to improve and grow their business. “We won three contracts right after we secured our line of credit with Pathway Lending. It gave us the confidence to bid differently because we know someone has our back,” said Myrick. “Other funders wanted to put us in a box and didn’t take the time to understand our business model, but Pathway did. We’re not out here by ourselves, we have someone to lean on.” Not only does APS now have an impressive fleet and a warehouse full of equipment, they have invested in automation.

Myrick credits his success to his willingness to ask for help, available through Pathway’s technical assistance and mentoring programs. From this experience, Myrick is building an environment of mentorship for his employees and giving them space to “safely fail.”

“Any employee who passes through here leaves better than they came,” Myrick said. “Some even go off to start their own businesses. We are no nonsense, straight to the point, and give them the tools they need to be successful for us, which happen to be the tools they need to be successful in life. Their success is our success.”

Impact:

  • $960,500.00 to purchase and refinance equipment necessary to improve cash flow and acquire new customers
  • $300,000.00 for access to additional Working Capital to bid more aggressively
  • 60 full-time jobs retained and 40 part-time jobs at the time of the loan; as of October 2016, the company reports 120 employees on staff

ACE Helps Family-Owned Analia Home Health Care Services Secure a Permanent Home

In 2008, right before the Great Recession, Kethy and Jean Michel took their 20 years of combined clinical experience to found Analia Home Health Care Services (Analia). Through Analia, the Michels wanted to take their passion for providing quality health care for children, families, and the elderly by providing 24-hour skilled nursing services and personal care. Their mission “to make your love ones as happy and comfortable in the only place that can bring them joy… the safety of their own home.”

The business has grown to serve 40 counties, employing 45 nurses in the metro-Atlanta area. Despite the growth, the Michels—who lacked an adequate down payment—were unable to obtain traditional financing when they were ready to transition from rented facilities to owning. That’s when they connected with Access to Capital for Entrepreneurs (ACE).

ACE's commercial loan officer, Anthony Flack, worked with Analia to secure a loan to purchase an owner-occupied commercial office located on Wall Street in Conyers. This permanent location would provide fixed cost stability, ultimately improving their sustainability and cash flow. Anthony worked with the Michel’s to help them obtain the required documentation needed for package-loan readiness. He provided guidance on what to expect for funding needs long-term to maintain the annual loan documents required by lenders, for site visits, and gain greater insight into understanding their financial statements as their business continues to grow.

With help from ACE, the Michel’s submitted their application in April and closed on their loan at the end of May. ACE provided down payment assistance, partnering with the State Small Business Credit Initiative (SSBCI) delivering a 95% LTV, which meant they only had to put down 5 percent toward the loan. This was a huge cost savings for the company.

"Having a permanent home for our operations gives us the stability and security to focus on building for the future," said Kethy.

ACE’s Wells Fargo Diverse Community Capital award was a vital source of capital used in conjunction with the SSBCI program to fund the plans to move to ownership, to help this vital resource in the community continue to grow and serve a diverse constituency of patients.

Impact:

  • 15 full-time jobs and 30 part-time jobs secured
  • Projected to add 50 jobs by 2019
  • Expanding 24-hour skilled service and personal care throughout the Altana-metro region

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.
Have you secured written permission from the borrower and others in this story to use their likeness and name for promotional purposes. Please be able to show a signed release or other written permission if asked. If you haven’t, we will call you to discuss. Thank you!

Resources and Webinars

The Diverse Community Capital program offers activities to build effective support networks and social infrastructure (Social Capital) among CDFIs for the purpose of increasing lending to diverse small businesses. Social Capital activities include mentoring, working groups, webinars, and other collaborative efforts to increase the capacity of CDFIs to lend to diverse business owners. Wells Fargo offers the Social Capital activities through OFN.

  • Innovations in Underwriting
  • View below the Innovations in Underwriting webinar from July 26th to hear from the contributing CDFIs about their best practices.
    • ​​Presentation PDF
    • Webinar Video
    • Highlights include:
      • Carolina Small Business Development Fund: Introduced a new “Equity Capture” loan product to provide an alternative approach for equity contribution by the borrower.
      • Montana & Idaho CDC: Dramatically simplified their underwriting practices to make loan decisions and provide TA faster, and focused on more qualitative evaluations of “skin in the game”.
      • Pacific Community Venture: Created a rating matrix based on past performance of loans which has allowed them simplify loan decisions, reduce collateral reqs, and lend to entrepreneurs with a broader range of credit scores.
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