It seems many black businesses have felt left behind with the Paycheck Protection Program delivered by the federal government, so NBA Basketball Hall of Famer, Magic Johnson, and his team have decided to do something about it.
Johnson’s investment promises to help support businesses that have been impacted by the coronavirus crisis.
“We knew why the money was gone and couldn’t trickle down to small businesses, especially small minority businesses, because they didn’t have those great relationships with the banks,” Johnson told WSJ. “So, this was easy for us to understand.”
[Black Enterprise] Former Los Angeles Lakers guard and team president Earvin “Magic” Johnson announced his life insurance company will provide $100 million for women- and minority-owned small businesses as part of the Paycheck Protection Program (PPP).
Johnson, the owner of EquiTrust, the nation’s largest minority-owned insurance company, will partner with MBE Capital Partners, a Latino-owned company, to provide supply chain finance solutions for Fortune 500 companies and their suppliers.
According to Forbes, Johnson was motivated after hearing reports of minority- and women-owned businesses being shut out of the PPP. At the same time, Johnson discovered the Lakers organization applied for and received $4.6 million from the program. The Lakers, worth an estimated $4.6 billion, returned the money after public pressure.
MBE’s Chief Executive, Rafael Martinez, said he received complaints from clients who couldn’t get loans from the PPP’s first round of funding. It was later reported that large banks prioritized existing relationships and large corporations before focusing on smaller and minority businesses.
According to the Center for Responsible Lending, up to 90% of businesses owned by people of color have been, or will likely be, shut out of the PPP program.
Magic Johnson said his life-insurance company will provide $100 million to fund thousands of PPP loans to minority-owned businesses https://t.co/hf7Ndwpbk1
— The Wall Street Journal (@WSJ) May 17, 2020
NBA legend Magic Johnson announced that he will offer $100 million in small business loans to entrepreneurs of color. https://t.co/gDyj5sRuUH
— Colorlines (@Colorlines) May 18, 2020
The Paycheck Protection Program ended up funneling millions to wealthy corporations but mostly left minority-owned small businesses behind. Good to see Magic Johnson stepping up for the community. https://t.co/jHTGi0oC7d
— MoveOn (@MoveOn) May 18, 2020
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