According to a new report in the Wall Street Journal, Earvin “Magic” Johnson is coming to the aid of minority businesses. Through his EquiTrust Life Insurance Company, Johnson will be able to provide 100 million dollars in capital through the Small Business Administration Paycheck Protection Program.
For the loans, Equitrust will join with MBE Capital Partners, a lender that specializes in financing minority and women-owned companies, The Journal wrote.
EquiTrust Life Insurance is one of the businesses owned by Magic Johnson Enterprises. According to their website, the mission of the company is to serve as a catalyst for fostering community and economic empowerment by providing access to high-quality entertainment, products, and services that answer the demands of multicultural communities.
Johnson’s investment will allow 5,000 minority-owned businesses to gain access to the fund.
“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 walk into the bank and get that loan,” Johnson told The Journal.
The legendary Laker founded Magic Johnson Enterprises in 1981 with an investment in two small radio stations. The company is estimated to be worth $1 billion.
According to a report by CBS News, up to 90% of Black and minority-owned businesses have been shut out of the Paycheck Protection Program. According to experts, one of the reasons why businesses have had challenges accessing funds is because they are being facilitated by private banks. The banks have been allowed to prioritize approval to their long-term customers.
In the report, Ashley Harrington, director of federal advocacy and senior counsel for the Center for Responsible Lending, said that Black-owned businesses are less likely to have those commercial lending relationships.
Johnson’s investment will help support businesses that have been impacted by the coronavirus crisis.