NBA legend Magic Johnson and billionaire entrepreneur Mark Cuban are reaching out to minority business owners who are struggling to navigate coronavirus shutdowns.
Johnson’s Magic Johnson Enterprises has partnered with MBE Capital partners to provide $100 million in loans specifically to businesses owned by women and minorities. On Twitter, Cuban also said he is working to connect minority and female business owners with banks to get access to more than $100 billion in funding.
Why It’s Important
Congress devoted $349 billion of its $2-trillion stimulus plan back in April to the Paycheck Protection Program, which provided loans to small businesses to pay employees during the shutdown. The money was quickly depleted, and a second round of $60 billion in funding is designated specifically for small businesses.
Unfortunately, many minority business owners do not have close relationships with banks and have not accessed the funding they need.
Johnson told CNBC that his company is reaching out specifically to business owners so that urban neighborhoods won’t lose businesses that have been around for decades.
“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,’” Johnson said.
Cuban said Wednesday that banks are itching to loan to qualified minorities and women.
“There are plenty of banks that want to earn their 5%. Let's connect them!” he tweeted.
Cuban has been a vocal critic of the PPP and has instead proposed a “trickle up economics” plan, that includes sending all 128 million U.S. households a $1,000 check every two weeks for the next two months that must be spent within 10 days of receipt.
“No amount of loans to businesses will save them or jobs if their customers aren't buying,” he said.
On Friday, the House passed a bill that would provide Americans with a second round of direct stimulus payments.