NBA legend and entrepreneur Magic Johnson has taken note, he pointed out, that loans to assist small business owners during COVID-19 aren’t trickling down to nonwhites and women who own those businesses. Johnson wants to do something about that, so he’s partnered with a New Jersey-based financial company to provide $100 million in funding as part of the Small Business Administration’s Paycheck Protection Program.
Johnson told The Wall Street Journal in a Monday, May 18 article that his company EquiTrust Life Insurance Co. with MBE Capital Partners will give $100 million in PPP loans to help small businesses owned by nonwhites and women.
The retired NBA star explained how crucial loans are to these businesses, especially now as many are in danger of not reopening when cities and states return to normal.
“We knew why the money was gone and couldn’t trickle down to small businesses, especially small minority businesses, because they didn’t have those great relationships with the banks,” Johnson explained. “So this was easy for us to understand … This is, when you think about it, life and death for so many business owners. They have nowhere else to turn.”
Johnson said that small businesses were finding it incredibly difficult to secure Paycheck Protection Program loans. Rafael Martinez, MBE’s chief executive, expressed he received complaints from his clients about not being able to get PPP loans at all during the first round of funding. He and Johnson reportedly were connected through civil rights activist Al Sharpton. Martinez has said that the $100 million commitment first will go toward the 5,000 PPP loans his company has approved so far.
The PPP loan, part of Congress’ stimulus funding, was set up to assist small businesses during the COVID-19 shutdown. But bigger businesses, including Shake Shake and the Los Angeles Lakers, received several millions in loans instead. Ruth’s Chris Steak House was another company that received a PPP loan, for $20 million, but gave it back after public backlash. Reports have indicated that some lenders prioritized those businesses with whom they had existing relationships.
Johnson’s COVID-19 related focus includes the March release of a PSA in which he speaks on practicing social distancing and hand washing.
During an April interview with ESPN, he compared the coronavirus to HIV and AIDS, and said, as with those illnesses, people again are spreading wrong information.
“The same issues we had then, we have now … Not being educated enough about HIV and AIDS,” said Johnson. “The same thing [is happening] with the coronavirus.”