Magic Johnson To Give $100M In Loans To Struggling Minority-Owned Businesses
"These are incredible businesses, small businesses, that have been the pillar of our community that also employ a lot of Black and brown people in our community."
NBA veteran Magic Johnson will provide $100 million in loans to minority and women-owned businesses struggling amid the coronavirus pandemic.
Johnson announced on Monday that EquiTrust Life Insurance Co., of which he owns a majority, will fund the loans through the Small Business Administration’s Paycheck Protection Program (PPP). EquiTrust will work in partnership with MBE Capital Partners — a nonbank lender specializing in loans for minority-and women-owned businesses.
The program was launched on April 3, as part of the federal government’s $2 trillion stimulus package, to help businesses keep their workforce employed during the pandemic. However, many small businesses in need were not able to apply for or receive funding before it first ran out on April 16. Meanwhile, big businesses including Shake Shake as well as Johnson’s old team, the Los Angeles Lakers, were able to receive millions of stimulus funding, though both companies returned the loans.
The inequities in financial aid — especially for minority-owned businesses — galvanized Johnson to help businesses get funding through PPP, which has started accepting applications again after Congress allocated an additional $310 billion.
"These are incredible businesses, small businesses, that have been the pillar of our community that also employ a lot of Black and brown people in our community," he told MSNBC on Sunday “... We wanted to make sure that minority-owned businesses got small business loans through the PPP program."
The Center for Responsible Lending, a nonprofit research and policy group, estimated in a report published in April that minority-owned businesses were far less likely to receive a PPP loan through a mainstream bank or credit union. Decades of structural inequalities have also left minority communities more at risk during the pandemic.