NBA legend Magic Johnson announced his insurance company will provide $100 million for loans for minority and women business owners who are struggling in the wake of the coronavirus pandemic.
The former Los Angeles Lakers superstar made the announcement during an appearance on MSNBC’s “PoliticsNation with Al Sharpton” on May 17.
The funds will be provided through EquiTrust Life Insurance Co., of which Johnson owns a majority. Together with MBE Capital Partners, a Latino-owned company, the loans will be distributed through the Paycheck Protection Program.
“Johnson’s EquiTrust is providing critical financial support to underserved communities and businesses that have been traditionally neglected,” EquiTrust and MBE Capital Partners said in a news release, CNN reported. “These small and diverse businesses often have difficulty developing strong lending relationships with big banks.”
Johnson hopes that the funds will help minority-owned businesses continue to serve their communities.
“If they close down because of lack of funding, it would create a lot of jobless black and brown people, and it would eliminate access to the resources the community needs,” he told Los Angeles Times. “We then would need to go outside of our community for our goods and services, and that not only puts a strain on people, it could hurt the property value.”
With this rollout, EquiTrust Life Insurance Co. and MBE capital partners aim to help 100,000 businesses weather the challenges brought about by the pandemic.
According to an April 2020 report from the Center for Responsible Lending, businesses owned by people of color have found it disproportionately harder to access PPP loans for a variety of reasons, including the way the program prioritizes businesses with employees.
“Nearly 95% of Black-owned firms were non-employers, and 91% of Latino-owned firms were non-employers,” according to the report.
Through their $100 million pledge, EquiTrust and MBE hope to improve the odds for these disadvantaged businesses.
“Me coming from Washington Heights in New York City, these are my sisters, my brothers, my cousins, my uncles and aunts, that needed this money,” MBE Capital Partners CEO Rafael Martinez told MSNBC. “So we had to take action.”