Since April, when the $2 trillion COVID-19 Stimulus Bill was passed and the Small Business Administration’s Paycheck Protection Program (PPP) began to address COVID-19’s financial hits, the first study to look at the novel coronavirus’ impact on Black and Latinx business owners, conducted by the Color Of Change and UnidosUS, found that 45 percent of these businesses will have to close by the end of the year, and only one in 10 reported that they had received funding.
Responding to the lack of federal help for entrepreneurs of color, former National Basketball Association (NBA) all-star Magic Johnson and Rafael Martinez, majority owner of the asset-based lender MBE Capital Partners, announced they will provide $100 million in loans, on MSNBC’s “PoliticsNation with Al Sharpton,” on May 17.
“I built my business in urban America, in the inner city and I was once one of those small business owners. So, I know how important it is to keep those employees working, keep those Black and Brown people working in those small businesses in our community,” Johnson told Sharpton. “And we can’t afford to let these people lose their businesses who have been working so hard to build their business and we want to help them grow their business and have scale, because that’s what’s important. Because if they get scale, then they can hire more people and the more people working the better for our community; because we know how high unemployment is in our community and this virus really affected our community in two different ways—health-wise as well as financial wise.”
The Federal Stimulus Survey Findings study, conducted from April 30 to May 12, showed that Black and Latinx business owners are indeed worried about the issues that Johnson mentioned. These concerns include not receiving federal assistance to prevent layoffs, being unable to suspend foreclosures until the crisis ends, attaining financial assistance to help them pay salaries and other business expenses and putting a pause on negative credit hits.
Upon recognizing that the PPP left many small business owners of color out in the cold, Martinez told Sharpton that when he and Johnson decided to fill the federal financial void, they did so in a week. “We want to make sure that everybody understands this is a call to action. This money is not going to wait for anybody. So, it’s there, we’re doing our job, and there’s a lot more to be done,” Martinez said. “Our goal with Magic and the teams is really to reach 100,000 businesses. So, we need action yesterday, not tomorrow or next week. Nobody is going to wait for us.”