Global Courant
A football with the NFL logo.
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The National Football League is doing everything it can to increase lending in underrepresented communities.
The league is borrowing $78 million from a syndicate of black and minority-owned banks and community development financial institutions.
The loan agreement will generate “tier 1 capital” for the banks and CDFIs. According to the National Black Bank Foundation, it will increase their borrowing power by millions through bank charges and interest. Full terms of the loan are not being released.
However, Joe Siclare, the NFL’s executive vice president of finance and league policy, said the terms are “market conform” and the league plans to use the loan in full over the next three years.
“These banks play a vital role in our overall economy and many of them are in markets that our teams play, so there’s a good synergy there,” Siclare told CNBC.
“These community banks sometimes struggle to navigate economic times. When major corporations like the National Football League can work together and provide reliable revenue streams, it helps those banks continue to do the great work they do in their communities,” he added up to it.
The NFL deal follows a similar $35 million loan tied to the National Basketball Association’s Atlanta Hawks for a 2020 practice facility and a $25 million loan to Major League Soccer in 2022, both of which were arranged by the NBBF and a syndicate of Black-owned banks.
Ashley Bell, co-founder of the NBBF, hopes these deals will prove that black and minority banks are viable long-term partners for big business, especially with the threat of an economic downturn or recession likely to have a greater effect on blacks. communities.
“These banks lend money to people and businesses that need it without being predatory. This gives them breathing space. These banks are centers of hope across the country. Whether they’re Martin Luther King, Jr Drive or Main Street,” said Bell. These are the places people go to get opportunities and by supporting these institutions, the NFL is supporting these communities.”
The NFL consulted with bank of America and the NBBF on its loan.
“It’s definitely a hit at a time when community banking is being questioned,” Bell said.
Bell said the regional banking crisis triggered by the collapse of Silicon Valley Bank in March has the potential to destabilize many black and minority financial institutions. The NBBF says black and minority banks are “hyper-local” in many cases, making 85% or more of loans to underrepresented groups in their area.
“Doing a deal with an entity like the NFL, that helps your brand. It helps people understand that you can make a complex deal. So if you can do a deal with the NFL, you can definitely trust that bank with your home loan” Bel said. “Surely you can trust that bank with a line of credit for your business, your church, your faith organization. You can go to them and trust them to give you the best service.”
According to Dominik Mjartan, CEO of Optus Bank in Columbia, South Carolina, one of 16 financial institutions collaborating on the loan.
“The NFL giving us this opportunity to participate enhances our ability to deliver on our mission to serve underserved, underrated high-potential customers and communities,” he said.
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