The Black Economic Alliance and Wells Fargo have launched the Black Economic Alliance Entrepreneurs Fund (BEA Fund), to accelerate the growth of Black entrepreneurs and business owners.
The $50 million BEA Fund will provide seed, startup, and early-stage capital funding to businesses founded or led by Black entrepreneurs. Wells Fargo will help support the effort with a $20 million commitment over five years to help boost the program’s operations and investments.
“Business ownership has been one of the best paths to multi-generational wealth creation for some Americans, but too few Black entrepreneurs have secured the financial resources necessary to launch and grow successful businesses. The Black Economic Alliance is proud to marshal resources to support more Black-owned businesses and founders, which will leverage hiring more Black workers and additional investment in Black businesses and communities,” David Clunie, executive director of the Black Economic Alliance said in a release. “We are thankful to Wells Fargo for providing $20 million in anchor funding to catalyze the launch of this important, long-term investment in Black entrepreneurs.”
According to the release, the BEA fund will recycle 100% of returns to support ongoing operations and investments in Black businesses and entrepreneurs.
Black businesses have been hit hard during the coronavirus pandemic. Last May, 45% of Black-owned businesses anticipated closing within six months. According to CBS News, President Joe Biden said 400,000 Black-owned businesses across the country have closed since the pandemic started at a press conference in February.
The BEA Fund’s investments will provide an equity stake in exchange for a capital investment and will offer straight loans to Black startups. The recipients will be chosen through an application process that will begin later this year.
Additionally, once the BEA Fund begins making investments, it will accept applications for all eligible Black entrepreneurs from emerging business founders, HBCU alumni, and Black businesses developers.
“We are committed to advancing racial equity in the communities we serve and beyond,” Wells Fargo CEO Charlie Scharf said in the release. “The Black Economic Alliance Foundation is well positioned to develop a strong pipeline of entrepreneurs who can accelerate Black-owned businesses and economic growth across the United States. We look forward to bringing our capital and expertise to this important collaboration.”