Network owners avoid credit scores due to credit program helping black-owned businesses

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Nets owner Joseph Tsai and Clara Wu Tsai during a match between the Brooklyn Nets and Indiana Pacers on December 21, 2018 at the Barclays Center in Brooklyn, New York.

Nathaniel S. Butler | National Basketball Association | Getty Images

Brooklyn Nets owners Joe Tsai and Clara Wu Tsai are taking the next steps to disburse money from a $ 50 million donation to minority communities.

The sports owners have created a $ 2.5 million loan program that targets black businesses affected by Covid-19. The money comes from the Tsai Foundation Social Justice Fund, which was installed last year, and aims to combat economic inequality in black communities.

The new loans are part of the EXCELerate program and are for owners with a credit rating of 620 or below. But while candidates will not be scored, business owners should be eligible “based on character.” Hence, they will need good guidance to secure their loan.

There are two types of loans. The “quick repayment” loan offers immediate funds up to USD 15,000 with no interest accrued. These loans are for businesses that operated during the pandemic but need capital to purchase new equipment, renovate, rent or lease.

Restart credit is for business owners who have temporarily closed or reduced their opening hours due to the pandemic. Jobseekers with good reviews can apply for up to $ 100,000 at a 2% interest rate to help restart and normalize, with payouts contingent on business success. When the $ 2.5 million program money is returned, it is returned and eligible for new loans. The interest on the loans will be used to cover administrative expenses.

Black self-owned business sign in the window of a local store, MisFits Nutrition, Queens, NY.

Lindsay Nicholson | Educational Images | Universal Images Group | Getty Images

“We know there is no social justice without economic opportunity, which is why we are so excited to launch the Brooklyn EXCELerate Lending Program to boost BIPOC in Brooklyn. [Black, indigenous, and other people of color] “The business owners are post-pandemic and are doing their little bit to overcome the barriers this community faces in accessing capital,” Wu Tsai said in a statement.

Ad used statistics from the National Bureau of Economic Research, which said the number of black-owned businesses dropped 41% in the early stages of the pandemic, compared with 17% among white-owned businesses. It also states that the loan program “aims to remove obstacles in the capital markets that create unfair obstacles for these entrepreneurs.”

Applicants need “community members” for reference, and loans do not “require either a collateral or a surety.” Social organizations, including TruFund Financial and Brooklyn Alliance Capital, will oversee lending. In addition, the Tsai Foundation has hired Gregg Bishop as the foundation’s executive director. Bishop is a former Commissioner for the New York City Department of Small Business Services.

“As the city recovers from the pandemic, we have the opportunity to do it better than we have done before, to remove some of the long-standing barriers to the accumulation of black wealth, and to ensure that everyone can benefit equally from capital. who comes to our city anew, ”the Bishop said in a statement.

Speaking with CNBC in August 2020Wu Tsai discussed the development of a five-point plan to strengthen social and economic equality after the death of George Floyd.

“You have to accept that racism exists, and you have to understand that there are systemic imbalances in society that cause racism and cause a lack of economic mobility and a lack of wage trajectory,” Wu Tsai said.

The Nets are contributing $ 60 million to tackling social issues, including $ 10 million donated to the National Basketball Association for $ 300 million to get started. “NBA Foundation… “

Tsai and Wu Tsai acquired a controlling stake Networks in 2019 for $ 2.35 billion after purchasing the original stake in 2017. And they also own the WNBA franchise, New York Liberty.

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