LOS ANGELES, CA / ACCESSWIRE / August 27, 2020 / EquiTrust, together with MBE Capital Partners and Carver Federal Savings Bank, funded another $225 million payroll protection loans on top of the $100 million EquiTrust and MBE pledged in May for loans to small minority and women-owned businesses, bringing the total to $325 million funded. These loans are directed to minority and woman-owned businesses, non-profits and religious organizations that were disproportionately left out of the Small Business Administration's (SBA) PPP loans to help them meet payroll and associated expenses during this time of unprecedented economic turmoil due to COVID-19.
"When we launched the EquiTrust MBE PPP loan program in May, we anticipated funding $100 million in loans. Not only did we exceed that threshold, but we received over 21,000 applications from small businesses proving a need for the $325 million," said Earvin "Magic" Johnson, chair of EquiTrust Life Insurance. "These businesses are a vital part of our economy and essential to the economic growth necessary for recovery from the pandemic. We have a responsibility to ensure an equitable distribution of federally backed capital to minority-owned small businesses."
Born out of a concern that women and people of color were having difficulty accessing the loans offered by the Small Business Administration's emergency COVID-19 relief program, Earvin "Magic" Johnson's EquiTrust Life Insurance company partnered with MBE Capital Partners, the country's only direct lending certified minority finance company and the largest independent finance provider for small and diverse businesses in the U.S., and Carver Federal Savings Bank, one of the largest African American operated banks in the U.S., to distribute the loans through the federal government's Paycheck Protection Program. The funds directly impact businesses that operate in and benefit underserved communities.
"After our initial $100 million investment, we expanded our relationship to include Carver Bank, with the SBA and the Federal Reserve to scale the amount of PPP loans that reached minority-owned small businesses. With Carver serving as our correspondent bank, we had access to the discount window at the Federal Reserve to do more PPP loans focused on minority-owned small businesses," according to EquiTrust CEO, Eric Holoman.
"The Payroll Protection Program benefitted businesses that had financial relationships, eluding businesses like the "mom and pop" corner store owners, hairdressers, barbers and churches. Of the 2.5 million black businesses, 90% have only one employee. Many minority-owned businesses are underbanked or non-banked with little access to capital. These businesses are the critical backbones of our communities," said Marc Morial, President and CEO, National Urban League. "This vital support at such a critical time allows these small businesses to sustain in the wake of the COVID-19 economic downturn."
The coronavirus shutdowns have been difficult for many - and particularly hard on minority business owners. Approximately 94% of small businesses in majority Black communities and 89% in majority Hispanic communities have less than two weeks' worth of cash reserves on hand, compared with 35% of White small businesses, stated the JPMorgan Chase Institute's report last year.
While unemployment increased dramatically during the pandemic across the country, the impact on communities of color is staggering. The number of Hispanic-owned businesses fell by 19% between February and May, compared with 15% for all small businesses, according to Robert Fairlie, an economist at the University of California at Santa Cruz, who used data from monthly surveys conducted by the Census Bureau and the Bureau of Labor Statistics. The declines for businesses with Black and Asian owners were 26% and 21% respectively, Fairlie found.
"When the PPP Program is done, we anticipate we will have facilitated up to $325 million in capital to minority-owned small businesses," stated MBE Capital CEO, Rafael Martinez. "We are grateful for the partnership with EquiTrust, and most importantly, we are thrilled to have provided an additional pipeline for small businesses to continue to build equity in the wake of such unstable times. I look forward to working on even bigger initiatives with our partners at EquiTrust."
ABOUT EQUITRUST
In June of 2015, Earvin "Magic" Johnson became majority owner of EquiTrust Life Insurance, the largest minority-owned life insurance company in the history of the country at $22 billion in assets. EquiTrust Life Insurance Company is a trusted provider of life insurance and annuity products with a strong track record of operating performance. We are a national carrier of competitive, client-friendly options, available through various distribution channels including more than 23,800 independent sales representatives and independent marketing organizations. EquiTrust offers fixed-rate and indexed annuities and life insurance and is headquartered in Chicago with operations in West Des Moines
ABOUT MBE CAPITAL PARTNERS
MBE Capital is a Latino-owned company providing Supply Chain Finance solutions for Fortune 500 companies and their suppliers. With over 31 years of knowledge, experience and credibility serving the minority business community. We provide several financial solutions receivables, purchase order and supply chain financing that allow small & diverse businesses to grow by managing cash flow effectively. In 2019, MBE Capital financed over $1.7B in Fortune 500, city, state and federal debt. On average, our clients have experienced 27% year over year growth.
Contact:
Ann Marchant
202.412.5605
SOURCE: EquiTrust