THE WHAT? Former basketball player Magic Johnson has collaborated with MBE Capital partners to offer $100 million in loans to minority- and women-owned companies set to be impacted by the COVID-19 quarantining legislation in the U.S.
THE DETAILS Funded through Johnson’s EquiTrust Life Insurance Company, the loans will go to companies such as African American and Latino businesses that have limited aid due to a lack of relationship with bigger banks.
Looking to help around 100,000 business in urban communities, application are vetted through SBA guidelines, with the money being paid via the Small Business Administration’s Paycheck Protection Program.
The qualification process is said to have been simplified to make it easier for companies to apply for loans.
THE WHY? Talking about the inspiration behind the decision, Johnson, CEO of Magic Johnson Enterprises, told CNBC’s Squawk Box, “This will allow them to keep their employees and keep their doors open.
“We have to remember that these businesses have been in urban communities for a long time. 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. Financially, this has really hurt our community as well as health-wise it’s hurt our community, too.”
Rafael Martinez, CEO of MBE, cited that the next stage would be to work with depository banks to multiply Earvin’s investment to ‘$1 billion or more.’