Magic Johnson Assists With $100M In Loans To Small Businesses

LOS ANGELES, CA ­– Former Lakers star and NBA Hall of Famer Magic Johnson is helping to provide $100 million in loans for small businesses owned by minorities that are struggling with the hardships of the coronavirus pandemic.

Johnson, the CEO of Magic Johnson Enterprises who helped guide the Lakers to five NBA titles during the 1980s, has partnered with MBE Capital Partners to offer the loans to businesses owned by minorities and women. The loans will be funded through Johnson’s EquiTrust Life Insurance Company and will be provided through the federal government’s Payroll Protection Program.

“This will allow them to keep their employees and keep their doors open,” Johnson said Tuesday during an appearance on CNBC’s Squawk Box.

After the first round of funding from the $349 billion was quickly dispersed to business owners as part of a larger $2 trillion stimulus package, a second pool of loan money was set up, of which $60 million was allocated for small businesses.

While the PPP loan program has helped businesses across the country, research has shown that businesses owned by people of color have struggled to obtain funding, due largely to the fact that they do not have working relationships with big banks, many of which are dispersing the loans.

Johnson hopes to change that.

“We have to remember that these businesses have been in urban communities for a long time,” Johnson said Tuesday. “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.’”

He added: “Financially, this has really hurt our community as well as health-wise it’s hurt our community, too.”

Rafael Martinez, the CEO of MBE, said Tuesday on CNBC that the funds could assist 100,000 businesses in urban communities. Applicants are vetted using the SBA guidelines. Martinez added the application process is now simplified, making “it easier to qualify for these loans.