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Wells Fargo backs $70m fund to help underserved SMEs access credit

Wells Fargo backs $70m fund to help underserved SMEs access credit

Wells Fargo is backing a new $70 million “equitable access fund” from Hello Alice and the Global Entrepreneurship Network (GEN) that will target underserved high-potential but credit-challenged small business owners.

The fund will provide credit enhancements, including guarantees, loan loss reserves and cash collateral deposits to financing firms to enable them to increase their risk tolerance to help unlock credit access to SMEs.

The fund, managed by GEN, aims to address untapped demand for business credit among small businesses, especially in those run by members of the New Majority, which includes women, veterans, BIPOC, Latinx, those with disabilities, and LGTBQ among other groups.

According to Hello Alice data, only 25% of small business owners have applied for a business credit card, and 85% of those applications were denied due to poor credit or lack of credit.

The $70 million fund aims to unlock up to an estimated $1 billion in credit access for thousands of small business owners.

Wells Fargo provided the initial major grant to start the fund. Financing partners will include First National Bank of Omaha, the issuer of the Hello Alice Small Business Mastercard, and partners in the Hello Alice Financing Marketplace.

Otis Rolley, president, Wells Fargo Foundation, says: “We need to create more pathways for historically marginalized small businesses to grow and prosper. We are honoured to join forces with Hello Alice, GEN, and the other partners involved to take one step closer to making equitable access to credit and capital a reality for small business owners across all industries.” 

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