DES MOINES, Iowa - NBA legend Earvin “Magic” Johnson announced this week that an insurance company of which he is a majority owner will offer $100 million in loans to minority- and women-owned businesses impacted by the coronavirus pandemic.
Johnson said his EquiTrust Life Insurance Co. will partner with MBE Capital Partners, an asset-based lender that specializes in loans for minority-owned businesses, to distribute the funds through the Small Business Administration’s Paycheck Protection Program.
The PPP, designed to support small business jobs impacted by COVID-19 as part of the federal government’s $2.2 trillion stimulus package, primarily uses banks, credit unions and Small Business Administration lenders to administer the loans.
But advocates say small and diverse businesses often have difficulty developing strong lending relationships with such organizations. The $100 million initiative aims to help under-served communities and businesses that have been traditionally neglected, EquiTrust and MBE Capital said in a joint news release.
Concern over whether banks have been prioritizing those that need the PPP money the most sparked the partnership. Last month, the Los Angeles Lakers repaid a loan of roughly $4.6 million that the organization had received from the PPP after learning the fund ran out of money in less than two weeks.
"These are incredible businesses, small businesses, that have been the pillar of our community that also employ a lot of, like you said, black and brown people in our community," Johnson told MSNBC. "We wanted to make sure that minority-owned businesses got small business loans through the PPP program.“
The goal is to help 100,000 businesses secure enough capital that will sustain them through the coronavirus pandemic, MBE Capital Parners CEO Rafael Martinez told MSNBC.
“Me coming from Washington Heights in New York City, there are my sisters, my brothers, my cousins, my uncles and aunts, that needed this money, so we had to take action,” Martinez said.
This story was reported from Cincinnati.