WHAT’S BEING CLAIMED:
- Former NBA superstar Magic Johnson, through a partly owned financial company, to grant loans of up to $100 million to minority and women-owned businesses.
- The company says it intends to address previous criticisms that it does not prioritize small businesses.
- The grants will be given through the Federal Paycheck Protection Program, and with a partnership with MBE Capital Partners.
Lakers icon and NBA legend Magic Johnson said on Tuesday that the insurance firm where he is a major stockholder would fund $100 million in credits intended for minority businesses owned by the women and minorities.
Assurance company, EquiTrust Life Insurance is to deal out the loans through the Federal Paycheck Protection Program (PPP) in linkage with MBE Capital Partners, according to a report by CNN.
Johnson said on MSNBC that he believes these small enterprises are doing great to the economy as it has been the fuel on the society, and the businesses give decent jobs to the black and brown people in our community.
The NBA Hall of Famer said he wishes help minority-owned companies, and he would make sure that they would avail small business loans through the PPP.
EquiTrust said the program intends to clarify issues that people of color and women have been unnoticed by the PPP. The company was previously criticized for giving loans to big businesses including Ruth’s Chris Steakhouse and Shake Shack and.
The Los Angeles Lakers, Johnson’s former team, was also granted a loan, and recent reports said the three companies had returned the cash.
In its latest joint press statement, EquiTrust and MBE Capital Partners said that Johnson’s EquiTrust is giving financial help to underserviced groups and businesses that have been usually overlooked.
The partners also believed that these multi diverse businesses typically do not have access to bigger banks.
CEO Rafael Martinez of MBE Capital said the trust targets 100,000 businesses and help them acquire enough funds to endure the coronavirus outbreak.
Meanwhile, supporters have commented that the PPP’s lending model, which mainly utilizes banks and Small Business Administration creditors as brokers, places people of color at a problematic situation as they find it difficult to establish connections with such financial institutions.
Center for Responsible Lending estimates that around 95 percent of businesses owned by blacks, 91 percent ran by Latinos, 75 percent of Asian-owned enterprises, and 91 percent of Hawaiian natives run businesses are not likely to be granted with a PPP loan through a big bank or known credit union.
Source: The Hill