Brooklyn Nets owners Joe Tsai and Clara Wu Tsai are taking the next steps to distribute money from a $50 million commitment to help minority communities.
The sports owners created a $2.5 million loan program that targets Black-owned businesses impacted by Covid-19. The money derives from the Tsai foundation’s Social Justice Fund, which was established last year, and aims to combat economic inequality in Black communities.
The new loans are part of the “EXCELerate” program and catered to owners with credit scores 620 or below. But though applicants will not be judged on the scores, business owners need to be “character-based” eligible. Hence, they’ll need to have good references to secure their loan.
There are two loan types. The “rapid recovery” loan offers immediate funds up to $15,000 and no interest attached. These loans are for businesses that stayed open during the pandemic but need capital for new equipment, renovations, rent or leases.
The “restart” loan is for business owners who temporarily closed or reduced hours due to the pandemic. Well-referenced applicants can apply for up to $100,000 at 2% interest to help restart and normalize operations, and repayments depend on the success of the businesses. When money from the $2.5 million program is repaid, it returns and becomes eligible for new loans. Interest made from the loans will be used for administration costs.
“We know that there is no social justice without economic opportunity, which is why we are so excited to launch the Brooklyn EXCELerate Loan Program aimed at elevating Brooklyn’s BIPOC [Black, indigenous, and other people of color] business owners post-pandemic and doing our small part to overcome barriers this community faces in accessing capital,” said Wu Tsai in a statement.
The announcement used statistics from the National Bureau of Economic Research, which states Black-owned businesses declined by 41% during the earlier stages of the pandemic, compared to 17% among white-owned businesses. It also says this loan program “seeks to address the obstacles within capital markets that create unfair hurdles for these entrepreneurs.”
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SOURCE: CNBC, Jabari Young