The flames of the novel coronavirus continue to burn hotter, making slow and painful deaths among many small businesses in the U.S inevitable. The economic situation seems to get more severe despite the government efforts to support small businesses while simultaneously fighting the spread of Covid-19. Most small businesses were at the phase of giving the last kick of a dying horse when magic happened. A former National Basketball Association player and Los Angeles Lakers legend, Magic Johnson, intervened on the 11th hour to save the situation.
The former NBA player, now the CEO of Magic Johnson Enterprises, together with MBE Capital Partners partnered to contribute $100 million that will be given in loans to women and minority-owned businesses affected by the continuing stay-at-home government directives. The funds were given through Magic’s EquiTrust Life Insurance Company and will be distributed through the Small Business Administration’s Paycheck Protection Program. “This will allow them to keep their employees and keep their doors open,” Johnson said when speaking to CNBC’s “Squawk Box” on May 19.
“These are incredible businesses, small businesses, that have been the pillar of our community that also employ a lot of black and brown people in our community,” Johnson told MSNBC on May 17. “… We wanted to make sure that minority-owned businesses got small business loans through the PPP program.” In a joint news release by representatives from EquiTrust and MBE Capital Partners, the partners stated, “Johnson’s EquiTrust is providing critical financial support to underserved communities and businesses that have been traditionally neglected.”
In April, Congress had allocated $349 billion for Paycheck Protection Program (PPP) from the $2 trillion stimulus package, which turned to be insufficient forcing the government to allocate another $60 billion for small businesses. The funds may have offered some help but will the persisting impacts of Covid-19, the relief didn’t last for long. More Americans continued to file job loss claims and the number of claims skyrocketing to about 39 million in May.
With the Magic aid, there may be some light at the end of the tunnel, but as always there are challenges. Businesses owned by African-Americans and Latinos face the risk of getting locked out from accessing the funds due to lack of any relationships with bigger banks. Some Democratic lawmakers including California’s senator, Kamala Harris have raised concerns about the situation and called on the SBA and Treasury Department to ensure minority-owned businesses can access the funds.
With the accessibility challenge facing many minority-owned businesses, some of them are at the risk of suffering a complete shutdown. “We have to remember that these businesses have been in urban communities for a long time,” Johnson stated. “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.’”
The CEO of MBE Rafael Martinez stated that the aid was projected to assist about 100,000 businesses in urban communities. Those applying to get the loans are vetted using the SBA guidelines. But Martinez also stated that the application process had been simplified and made it easier to qualify for the loan. He added that there was a lot of money left and they targeted to work with depository banks to push the investment to at least $1 billion.
Surprisingly, his former team, The Lakers applied to get $4.6 million loan from the funds, a move that was highly criticized compelling them to return the money. “They did the right thing,” the 60-year-old 5 time NBA title winner with The Lakers said. “Jeanie Buss [Lakers owner] is a very good owner, and she’s smart, so I’m glad that she returned the money because there is a lot of companies out here who really need that money and she was smart enough to understand that.”
To apply for the loans, you need to have your NAICS number with you. You can confirm your NAICS number at https://www.naics.com/code-search/?naicstrms=Media before you proceed to apply for the loan. To apply for the SBA loan, use this link; https://www.mbecp.com/.
To all black American and Latino business owners out there, please do not shy away from applying for the SBA loan, it is meant for you. Don’t be left out, both those with a good relationship with bigger banks and those without.
To the minorities operating in the real estate sector, The Power Is Now Media is here to assist you. If you need any guidance on how to cope with these trying times, we have a team of VIP Agents who are ready to help you. To check whether you have any VIP agent from your area, use the following link https://thepowerisnow.com/vipagentsservices/. If you don’t find an agent from your area, you can contact me directly for a referral. Also, ensure you stay updated with any current real estate developments by regularly checking our blog page at https://thepowerisnow.com/blog/. You can also set up an appointment to speak directly to me at https://calendly.com/thepowerisnow/ericfrazier.
Disclaimer: The views and opinions of Eric Lawrence Frazier are his own and do not necessarily represent views of First Bank or any organization affiliated with Eric Lawrence Frazier, or the Power Is Now Media Inc. First Bank is an Equal Credit Opportunity Lender. Eric Lawrence Frazier MBA is also a Vice President and Mortgage Advisor with First Bank. NMLS#461807 and a California Licensed Real Estate Broker DRE# 01143482. Email: Eric.firstname.lastname@example.org. Ph: 714- 475-8629.
Eric Lawrence Frazier MBA
President and CEO
The Power Is Now Media Inc.