Magic Johnson grants $ 100 million in loans to minority-owned businesses

Los Angeles Lakers legend Magic Johnson is offering $ 100 million in capital to help fund federal loans to minority-owned business owners and women whose businesses have been affected by the coronavirus pandemic.

Johnson is working with MBE Capital Partners to offer the loans to those affected by COVID-19 stay-at-home orders. The loans were funded through Johnson’s EquiTrust life insurance company, of which he is a majority shareholder, through the Small Business Administration’s Paycheck Protection Program.

“This will allow them to keep their employees and keep their doors open,” Johnson told CNBC’s “Squawk Box” Tuesday.

News of the program was first reported by The Wall Street Journal.

“Johnson’s EquiTrust provides essential financial support to underserved communities and businesses that have been traditionally neglected,” EquiTrust and MBE Capital Partners said in a joint press release. “These small, diverse businesses often struggle to develop strong lending relationships with the big banks.”

“These are amazing businesses, small businesses, that have been the backbone of our community and also employ a lot of black and brown people in our community,” Johnson said. said Sunday on MSNBC. “… We wanted to make sure that minority-owned businesses get small business loans through the PPP program. “

As part of the $ 2 trillion stimulus package in April, Congress set aside $ 349 billion in the P3 fund, but the money quickly ran out, forcing another round of aid. The new funds include $ 60 billion earmarked for small businesses.

In an interview with CNBC on Tuesday, Johnson cited the need to keep African American and Latin American businesses viable in communities during the pandemic.

“We have to remember that these businesses have been in urban communities for a long time,” Johnson said. “They did great things, and they probably didn’t have a relationship with the banks when the stimulus package was launched. So now we’re in a position to say, “Hey, you can have a relationship with us. “

“Financially it has really hurt our community as well as the health level, it has also hurt our community,” Johnson added.

Rafael Martinez, CEO of MBE, Jabari Young of MSNBC told that the funds would seek to help 100,000 businesses in urban communities. Applicants to the program are vetted via SBA guidelines and the application process has been streamlined to make getting loans easier.

A Hall of Fame member who helped the Lakers win five NBA titles in the 1980s, Johnson, 60, has been building businesses steadily since his retirement. He told CNBC he was surprised the Lakers requested (and received) a $ 4.6 million SBA loan, money the team has since returned.

“They did the right thing,” he said. “[Lakers owner] Jeanie Buss is a really good owner, and she’s smart so I’m glad she returned the money because there are a lot of companies here that really need this money and she was smart enough to figure it out .

Asked about the return of the NBA and other professional sports to action, Johnson backed a safe restart with “empty stadiums.”

“We need it,” Johnson said on CNBC. “We thrive in our sports. This is how we escape our daily life, it is to indulge in sport. So, we need the sport to come back, especially if we are going to continue to stay at home. “

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