The Magic Johnson company EquiTrust Life Insurance Co, will be reportedly providing $100 million for Black-owned businesses. EquiTrust Life Insurance Co will fund the money via the Small Business Administration’s (SBA) PayCheck Protection Program, as they believe minor businesses are being ‘overlooked’ during the COVID-19 pandemic. EquiTrust Life Insurance Co is majority-owned by the Magic Johnson enterprises.
According to the Wall Street Journal, the Magic Johnson company owned by Magic Johnson enterprises will be teaming up with MBE Capital Partners to provide PayCheck Protection Program loans. MBE Capital Partners is a non-bank lender that focuses on funding women-owned and minority businesses. While talking to the Wall Street Journal, Johnson stated that their initiative is important as small businesses cannot walk into a bank and ask for a loan.
Johnson added that he became aware of the problems faced by these businesses through news reports. MBE Capital’s chief executive Rafael Martinez also noticed that people applying for the PPPP were facing problems as they were reportedly favoring companies with previous relationships. After Martinez started receiving calls to help, their collaboration with the Magic Johnson company took place.
Many big companies, including Johnson’s former NBA team the Los Angeles Lakers, received the funding as they have less than 500 employees. However, they returned the funding after facing public criticism. The Magic Johnson company was aware of the reason behind small businesses not receiving the funds, especially when larger companies had good relationships with banks.
MBE and the Magic Johnson company finalized their deal this month. They were brought together by the National Action Network, which is a civil rights organization.
According to Martinez, Johnson’s $100 million will be promptly forwarded to the 5000 PayCheck Protection Program’s loans that MBE Capital had approved with the Small Business Administration. 80% of the minority-owned businesses have reportedly asked for around $25,000 owing to their small size. Their companies are apparently choosing people no one else is willing to help.
The government had reportedly instructed SBA to guide lenders in helping the small businesses. However, they reportedly failed to do so.
Magic Johnson is also looking for different ways to help minority communities, as per the Wall Street Journal. This includes raising money to help give meals to inner cities while looking to extend their deal with MBE Capital. During his interview, Johnson stated that priority will be minority communities. As per Johnson, this is a ‘life and death’ matter for many business owners and they will help them as they have ‘nowhere else to turn’.