Brooklyn Nets owners Joe and Clara Tsai have created a $2.5 million loan program targeting Black businesses impacted by COVID-19.
The funds are part of a $50 million commitment from the Tsai foundation’s Social Justice Fund to help minority communities. The loans will be specifically for those with credit scores of 620 or below. However, applicants will not be judged by their credit scores, meaning they’ll need solid references to receive a loan.
Two types of loans will be available for applicants. The “rapid recovery” loan offers immediate funds up to $15,000 with no interest attached for Black businesses that stayed open during the pandemic but still need funds for equipment, renovations and rent.
“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,” Clara Wu Tsai said in a statement.
The “restart” loan is designed for Black business owners who temporarily closed or reduced hours due to the pandemic. Well-referenced applicants can apply for up to $100,000 at 2 percent interest to help business owners fully reopen and normalize business operations.
When the money for the loans are paid back, it returns to the fund and new applicants can apply for a loan. The interest charges will be used for administration costs.
Black-owned businesses were crushed during the coronavirus pandemic. According to the House Committee on Small Business, Black business ownership dropped 41 percent between February and April 2020. Additionally, Forbes reported in August 2020 the pandemic nearly wiped out half of Black small businesses. Black-owned businesses also struggled obtaining Paycheck Protection Program funding.
TruFund Financial and Brooklyn Alliance Capital will oversee the loans and Gregg Bishop has been hired as the executive director of the fund. Bishop previously served as the commissioner of the New York Department of Small Business Services and believes now is the time to make equitable changes to help Black businesses.
“As the city comes back from the pandemic, we have an opportunity to do it better than we did before, to address some of the longstanding barriers preventing the accumulation of Black wealth and ensure that everyone can equally benefit from the capital that is coming into our city anew,” Bishop said in a statement.