Most minority owned small businesses were not able to take advantage of the short-term loans being offered by the federal government during the onset of the coronavirus. Thankfully, basketball legend Magic Johnson is here to help.
Many people may not know this, but Johnson has become an incredibly successful businessman since retiring from the NBA. In an era when professional athletes are increasingly focused on building their "personal brands," Johnson was a true pioneer. Rather than simply squeezing every last dollar out of traditional corporate endorsements, he has integrated personal principles into his business ventures. For example, in the early 1990's the Johnson Development Group launched Magic Johnson Theaters, a chain of cutting-edge movie theaters in urban centers that were often ignored by the national theater chains. Johnson eventually sold his stake in the chain to AMC but they've left a lasting imprint in black and other minority communities.
Now, Johnson is using his sizable clout as a celebrity investor to help out minority owned businesses that have struggled to acquire small business loans during the coronavirus.
According to CNBC, Johnson has partnered with MBE Capital Partners to source $100 million in loans to minority and women-owned small businesses. The loans will be distributed through the same federal government program that is currently issuing small business loans but will be earmarked to target businesses in need.
"This will allow them to keep their employees and keep their doors open," Johnson said in an interview with CNBC's "Squawk Box."
"We have to remember that these businesses have been in urban communities for a long time," Johnson told CNBC. "They've been doing great things, and they probably didn't have a relationship with the banks when the stimulus package went out. So now, we're able to say, 'Hey, you can have a relationship with us.'"
A representative for MBE said the loans could help as many as 100,000 small businesses over the coming months, with an application process that is meant to simplify and expedite a process that has often been criticized as overly complicated and slow.
Even better, MBE CEO Rafael Martinez said the program could be expanded to upwards of $1 billion.
"There is a ton of money left," he said.
As Johnson himself noted, getting money to minority and women owned small businesses isn't just important for the economy. As numerous reports have shown, minority communities are the hardest hit by the coronavirus. That's likely due to a number of reasons including lack of access to health care, lack of health nutrition and equal educational opportunities that facilitate healthier lifestyles. Simply put, financial resources are directly tethered to a community's health. Keeping people employed and building economic resources aren't just the right thing to do, they are imperative to offset the incredible damage done to these communities by the coronavirus and to help build a foundation to buffer them against the next crisis.
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