With the affects of COVID-19, small businesses in urban communities are at risk now more than ever. Former NBA legend, Magic Johnson has stepped in to offer some assistance to minority-owned companies.
Magic Johnson, the CEO of his own company Magic Johnson Enterprises joined together with MBE Capital CEO Rafael Martinez to offer $100 million in loans to minority owned companies affected by the stay-at-home order due to COVID-19.
Rafael Martinez, CEO of MBE said on MSNBC, the goal for this collaboration is to help at least 100,000 businesses in urban communities.
The loans were funded through Johnson’s EquiTrust Life Insurance Company, which he has held majority stake in since 2015. Each loan distributed will be provided through the Small Business Administration’s Paycheck Protection Program.
Due to their relationship with bigger banks, many African American and Latino-owned businesses were left out of the initial allotment from Congress of $349 billion for PPP funds in April and when that ran out, the additional $310 billion was approved, including $60 billion designated to help small businesses.
Johnson told CNBC’s “Squawk Box” on Tuesday, “We have to remember that these businesses have been in urban communities for a long time,” Johnson said. “They’ve been doing great things, and they probably didn’t have a relationship with the banks when the stimulus package went out. So now, we’re able to say, ‘Hey, you can have a relationship with us.’”
The application process is now simplified, making it easier for more people to qualify for the loans. The applications for the loan are vetted using the SBA guidelines.
By Tatiana Battle
Photo credit: The New York Times