MoFi gets $2.1 million Wells Fargo grant to expand program

Wells Fargo recently provided a $2.1 million grant from its Open for Business Fund to MoFi, which will enable it to expand a post-COVID loan fund it established last fall.

“The Thrive program is providing flexible working capital loans to nearly bankable businesses looking for a bridge to the other side of the pandemic,” said Dave Glaser, president of MoFi, in an email message. “The generous $2.1 million grant from Wells Fargo is allowing MoFi to provide those loans at the friendliest rates and terms possible, including a reduced introductory interest rate of 3%.”

MoFi, formerly known as Montana & Idaho Community Development Corp., is a community development financial institution. In addition to its traditional programs, by late May last year it had loaned out almost $10 million in Paycheck Protection Loans from the federal Small Business Administration to more than 300 Idaho businesses.

The Thrive program, started last fall, is intended to lend business owners profitable in 2019 up to $50,000 or $100,000, depending on their credit rating, which they can pay back within five years — with the first two years being interest-only. The hope is that after two years of interest-only payments, the business will be able to refinance the loan.

It is limited to businesses within MoFi’s operating area, meaning located in Montana, Idaho, Wyoming, Washington or Oregon.

In addition, businesses can receive up to $2,500 in grant funding to cover loan closing fees and expenses for businesses, free COVID-19 response consulting services. The application process is intended to be accessible, with an online application that can provide funding in up to 36 hours, MoFi said.

MoFi said it expects the Thrive loan to complement the relief businesses owners may access through the federal stimulus package, which includes the Paycheck Protection Program. Thrive loans can be used for a wider variety of purposes that the PPP may not cover, allowing businesses to pivot their operations and even grow, Glaser said in a statement.

In particular, with Thrive, MoFi is building on its commitment to reach businesses owned by, located in or serving low-income people and people of color, including Native American and Hispanic communities, the organization said, noting that one-third of its Thrive loan funds are reserved for minority-owned businesses.

MoFi got the idea for the program last year after some Small Business Administration programs started to sunset. It was intended for businesses that need working capital to get through the winter and the spike in the coronavirus, but it is now expected to help up to 250 businesses across the region, with an estimated average loan size of $40,000. In addition, because Thrive loans support a variety of different uses, the program can help bridge any remaining capital needs for businesses that have already used all available government programs.

As of its formation, MoFi committed $10 million to the program.

Created last year, Wells Fargo’s Open for Business Fund is providing grants to community lenders and nonprofits to help businesses respond to the challenges of COVID-19. Organizations use the funds to provide capital, technical assistance and long-term resiliency support.