The Global Entrepreneurship Network and Houston-based fintech Hello Alice have launched a $70 million fund backed by Wells Fargo to improve access to credit and capital for small-business owners who are members of underserved groups, including women.
San Francisco-based Wells Fargo & Co. (NYSE: WFC) provided the initial grant to start The Equitable Access Fund, and financing partners include First National Bank of Omaha.
The fund will be developed and deployed over the next five years and will provide credit enhancements, including guarantees, loan loss reserves and cash collateral deposits, to financing partners to help unlock up to an estimated $1 billion in credit access for thousands of small-business owners.
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. However, 90% of small-business owners without business credit believe a business card would impact their business in a positive way.
Hello Alice co-founders Elizabeth Gore and Carolyn Rodz said there is an estimated $40 billion annually of unmet financing demand from BIPOC-owned employers that applied for financing alone and an estimated $1 trillion in unmet demand from all small businesses nationally.
Hello Alice and The Global Entrepreneurship Network said they will continue to work with and bring on new financing partners over the next several months to build out the fund.
The new fund is part of the Equitable Access Program run by Hello Alice and GEN. Additional program partners include Mastercard Inc. (NYSE: MA) and the Kauffman Foundation.
Based in Houston, Hello Alice is a free platform serving more than a million U.S. small businesses and is committed to equitable access to capital for women, people of color, members of the LGBTQ+ community, veterans, and entrepreneurs with disabilities.
