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(CNBC) Lowe’s announced that it would assist minority-owned businesses with $25 million in grants to support efforts to relaunch the American economy.
Lowe’s is dishing out the funds to help small businesses, especially home improvement professionals, in need of masks, personal protective equipment and other supplies to operate safely. The new funds follow $340 million of support the home improvement retailer provided for Covid-19 response activities in the first quarter.
“These are going to be minority businesses and other businesses that are now starting to reopen,” CEO Marvin Ellison told CNBC’s Jim Cramer in a “Mad Money” interview. “So we just want to continue to not only run a good business but also be a great corporate citizen in all of the communities that we operate in.”
The news follows a $100 million commitment from businessman and basketball Hall of Famer Earvin “Magic” Johnson, through his majority ownership in EquiTrust Life Insurance Company, to work with MBE Capital Partners to help minority and women business owners who have had a hard time getting their hands on capital in the Payroll Protection Program, the small enterprise rescue program established under the federal government’s $2.2 trillion stimulus package.
The retired Los Angeles Lakers legend, whose former team itself returned $4.6 million in PPP loans after falling under scrutiny, said he stepped in to assist businesses that had a disadvantage in accessing the funds through lenders.
A watchdog report found that “rural, minority and women-owned businesses may not have received the loans as intended” because the SBA failed to advise lending institutions to prioritize underserved communities as laid out in the spending measure.
“To all my fellow CEOs out there running large companies: Let’s do our part to help the small businesses get back up and going,” Ellison said.
The $25 million worth of grants from Lowe’s doubles the amount it has provided for coronavirus response. In March, the company announced $25 million in support for workers, customers and communities. That included $10 million donated to get PPE to medical professionals on the front lines of the fight against coronavirus.
As nonessential businesses, particularly retailers, were forced to shut down operations as the coronavirus spread rapidly in the U.S., Lowe’s remained open. The company delivered $80 million in special payments to hourly workers in March.
Another $80 million has been approved for workers this month, which breaks down to $300 for full-time and $150 for part-time employees. The company’s profit-sharing payout in June will exceed $90 million, Ellison said.
“It’s all about trying to do what is best for our associates first and our community, and we’re proud that we could be there for them in these really unique times,” he said.
“Our culture is about doing the right thing for our communities and our associates.”
Many businesses are expected to shut down completely, due to the coronavirus-induced downturn that devastated the U.S. economy and global markets. Many that do decide to open their doors again will have many hurdles to overcome.
With the country partially reopened, Lowe’s has helped offer advice to other businesses looking to operate in the new normal. The company shared guidelines it used to operate safely during the pandemic with the Retail Industry Leaders Association.
“We gave it to them to share with other retailers because the only competition that we have is the virus,” Ellison said. “We have to work together to get this economy going, and my message to America is: Support your local businesses, support your small businesses and let’s do our part to maintain social distancing so we can get this virus behind us as quick as possible.”
Shares of Lowe’s rose .10% to $116.99 during Wednesday’s session after the retailer recorded an 11% increase in same-store sales in the April quarter. The company did caution, however, that sales could “moderate” later this year.