Since leaving the NBA, Earvin “Magic” Johnson always seems to be making one trade move after another. The founder of Magic Johnson Enterprises has invested in many lucrative businesses including movie theaters, restaurants (TGI Friday’s, Sodexo and Burger King) and his former NBA team, the Los Angeles Lakers.
Now, the former baller wants to find ways to help minority communities hit hard by the coronavirus crisis. He announced that his life insurance company – EquiTrust Life Insurance Co. – will distribute $ 100 million to help women, blacks and minority-owned businesses who have struggled to obtain loans under the scheme. payment protection program (PPP).
Many black-owned businesses were excluded from the PPP program, which ran out of money after several state-owned companies applied for and received funding that was supposed to go to small businesses.
One of the companies that got funding, ironically, was the LA Lakers – who are valued at $ 4.4 billion, making them the second most valuable NBA team in 2020. The Lakers made the PPP funds .
Johnson is the former president of Lakers basketball operations.
Many people, including government officials, have been shocked at how large companies have taken advantage of the PPP program offered by the Small Business Administration.
“I hadn’t expected in a million years that the Los Angeles Lakers, who I’m a huge fan of the team, but I’m not a huge fan of the fact that they took a loan of $ 4.6 million, ”Treasury Secretary Steven Mnuchin said. said on CNBC. “I think it’s outrageous and I’m glad they gave it up or they would have had a responsibility.”
For Johnson’s new initiative, his insurance company EquiTrust has partnered with MBE Capital Partners to create additional financing for venture firms. MBE, based in Fort Lee, New Jersey, is a non-bank lender specializing in financing minority and women-owned businesses.
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MBE chief executive Rafael Martinez told the Wall Street Journal that Johnson’s $ 100 million pledge will first be used for the 5,000 PPP loans his company has approved so far.
“This is, when you think about it, life or death for so many business owners. They have nowhere to turn, ”Johnson told the WSJ.
Johnson spoke about racial disparities in testing for covid-19, highlighting how he benefited from early detection when he found out he had contracted HIV, Clutch Points reported.
The SBA guaranteed loans made through the PPP under the CARES Act, passed by Congress to provide economic relief during the coronavirus outbreak. The participating lenders processed the loans, which were first come, first served. Banks have been accused of favoring their own large clients over qualified small business applicants.
“What we’re launching here now is so important because we’re going to save a lot of small minority businesses because they can’t just go into the bank and get that loan,” Johnson said in an interview.
“We knew why the money was gone and couldn’t trickle down to small businesses, especially small minority businesses, because they didn’t have these good relationships with the banks. So it was easy for us to understand, ”Johnson told the WSJ.