Magic Johnson Providing $100 Million to Fund Small Business Loans

Jordan Cohn
May 19, 2020 - 9:15 am
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Magic Johnson has done a whole lot to serve the community.

There's the Magic Johnson Foundation, created to help the fight against HIV and AIDS along with goals involving educational and social achievements throughout underserved, diverse communities. There's his creation of the Magic Card, a pre-paid MasterCard designed to help low-income become a larger part of the economy. He partnered with food service company Sodexo to serve communities in need. He recently was named as a leader of a Mount Sinai task force after they founded a new institute aimed to research and fight health disparities in struggling communities. He donated $1 million to Central State University in an effort to help students succeed and access educational opportunities. And the list goes on.

A new addition to that long list increased his Central State donation, an extremely generous one, a hundredfold. First reported by the Wall Street Journal, the NBA Hall of Famer said that EquiTrust Life Insurance, a company of which he owns the majority, will provide $100 million to help fund federal loans (h/t CNN's Harmeet Kaur). These PPP loans -- named as such as they are obtained through the government's Paycheck Protection Program -- are utilized by small businesses.

Johnson joined Rafael Martinez, and shared that he wants to make sure minority-owned businesses are getting the loans they deserve through the Paycheck Protection Program on an interview with MSNBC.

"These are incredible small businesses that have been the pillar of our community that also employ a lot of... black and brown people in our community," Johnson said. "So what we did was, we came together in a partnership -- MBE Captial and EquiTrust and I -- and we wanted to make sure that minority-owned businesses got small business loans through the PPP.

"I will write a $100 million check, and Rafael and his company will deploy that money and make sure that they vet the small businesses in our community."

Martinez, a chief executive at MBE Capital, had reportedly been told by some of his clients that loans weren't accessible to them, and according to Lisette Voytko of Forbes, it was revealed that loans may have been distributed to certain businesses over others given prior relationships between the lenders and those companies.

The partnership between Johnson and Martinez will look to fairly distribute the federal loans and make sure that previously underserved companies get the money that they are rightfully entitled to through this program in order to reap the same benefits that other companies are receiving during this trying time.

During this pandemic, the emphasis on supporting small businesses is greater than ever, and Johnson is clearly honing in his efforts on making this rough patch as workable as possible through this $100 million donation. The legend has a unique perspective and understanding of the crisis, as he told Malika Andrews of ESPN.

"The same issues we had then, we have now," Johnson said, referring to the "bad information" and lack of education surrounding HIV and AIDS. "The same thing [is happening] with the coronavirus."

He additionally stressed the importance of testing accessibility, telling CNN that the primary reason he's still alive is because he was able to detect his illness early enough to begin treatment and prevention of worsening symptoms. Thus, it's not surprising that he's been so involved in working to fight against coronavirus and the subsequent financial and social fallout of the disease.

$100 million is a lot of money, but Johnson has worked hard enough and found tons of success to be able to provide such a lofty figure. Johnson's investment firm, Magic Johnson Enterprises, is worth around $1 billion given all of its investments throughout various industries (according to Clutch Points). He himself is worth an estimated $600 million, thanks to multiple business ventures that included owning stakes in multiple sports teams in Los Angeles, a movie theater chain, a Starbucks chain, his Hall of Fame playing career, endorsements and more.

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