As the COVID-19 pandemic threatened thousands of small businesses across the US in 2020, Magic Johnson used his influence and wealth to help struggling entrepreneurs. Through his company, Johnson developed a lending system aimed at funding Black, Latino and women-owned businesses.
The pandemic brought unprecedented challenges to small businesses, and government restrictions forced establishments to close or operate with very limited capacity. Most business owners struggled to cover payroll, rent and other expenses.
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Why did Magic come to the rescue of small minority businesses?
Those businesses lacked financial reserves, and securing emergency funding could determine whether they would survive. Magic did not just recognize that problem. He responded to it.
Johnson’s response was committing $100 million in loans through EquiTrust Life Insurance Company, which was majority-owned by his Magic Johnson Enterprises. The funding supported loans through the federal government’s Paycheck Protection Program (PPP).
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Explaining the purpose behind the commendable initiative, Johnson said, “This will allow them to keep their employees and keep their doors open.”
Magic understood the banking barriers facing Black and Latino entrepreneurs
For Johnson, the problem was not just that businesses needed money. He also understood that keeping these businesses alive meant protecting more than their owners’ livelihoods.
Even before the pandemic, Johnson knew that many minority-owned companies had already spent years operating without a banking relationship that could provide access to conventional financing. The NBA Hall of Famer explained how that issue further inspired his initiative.
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“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 said in another interview at the time “… We wanted to make sure that minority-owned businesses got small business loans through the PPP program.”
Moreover, Magic also pointed out why the program needed to reach entrepreneurs who had traditionally been overlooked by financial institutions.
“We have to remember that these businesses have been in urban communities for a long time,” Johnson said. “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.'”
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Magic’s initiative grew beyond its original commitment
Bigger figures backed up Johnson’s concerns. A 2023 Federal Reserve Bank of New York study using 2020 survey data found that Black-owned businesses were 8.9 percentage points less likely than similar white-owned firms to receive PPP loans.
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A few months after Johnson announced his $100 million loan initiative, he and his partners decided to expand their commitment. In August 2020, Johnson announced that EquiTrust, MBE Capital Partners and Carver Federal Savings Bank had funded an additional $225 million in PPP loans. The expansion saw their combined commitment to $325 million.
Looking back, Johnson’s $100 million loan provision was an admirable effort to address a problem that predated COVID-19. Much like his impact on the basketball court, Magic’s ambition was to make a difference beyond the spotlight, and it’s safe to say he has already accomplished it.
However, Johnson has no plans to stop helping others. Through his Magic Johnson Foundation, Johnson continues to support ethnically diverse, urban and socio-economically underserved communities.
This story was originally published by Basketball Network on Nov 14, 2026, where it first appeared in the Off The Court section. Add Basketball Network as a Preferred Source by clicking here.
