Will Small Businesses Bounce Back?

All of a sudden, the city has welcomed its latest tide of change in the pandemic, perhaps ushering in the beginning of the end of strict COVID-era rules and regulations. Masks are no longer required in schools or in many indoor settings and they’ve already become an increasingly infrequent accessory outdoors, on the streets. As of Monday, March 7, businesses like restaurants and bars are no longer required to check for vaccination status, either.

But many local joints didn’t survive to mark the occasion. “Walking the streets, anywhere — in anyone’s community — you see vacant storefronts,” Upper East Side Council Member Julie Menin said during an oversight hearing, which she chaired on the same day that the vaccine mandate ended.

An estimated one-third of New York City’s small businesses will close their doors for good as a result of the pandemic; for some, that day has already come and gone. “The pandemic has tested us all, but small businesses have been hit especially hard,” said NYC Department of Small Business Services (SBS) Commissioner Kevin Kim. SBS, a city agency, has connected small businesses with over $175 million in grants, shifting many of its operations online when in-person work came to a near-ubiquitous halt.

Yet in hindsight, there was more that could have been done to help struggling businesses stay afloat, according to Menin and others who joined in providing testimony during the March hearing. “There were clearly numerous problems that hampered the ability of the small business community to equitably access needed financial relief and services,” Menin said.

An Uphill Battle

Businesses operated under a culture of confusion and hostility during the pandemic, according to testimony at the small business hearing; guidelines to comply with new pandemic-era rules weren’t always clear, stoking fear and anxiety in business owners. “We need to stop with inconsistent enforcement and conflicting compliance information,” said Andrew Rigie, executive director of the New York City Hospitality Alliance.

SBS has worked to “unlock economic potential” for “all New Yorkers,” according to Kim, and offered 51 new or expanded initiatives during the pandemic to aid with recovery, with its total tally of services surpassing 337,000 over the past few years. But only around two percent of the city’s 200,000-plus small businesses found federal funding through Fair Share NYC, an initiative launched by SBS and then-Mayor Bill de Blasio. Most funding through SBS’s “Employee Retention Grant Program,” intended to benefit “mom and pop” stores, according to Menin, ended up in the pockets of attorneys, physicians and dentists. Seven council districts, including five in the Bronx, received zero funding through another program, the “Small Business Continuity Loan Fund.”

“Since the programs were designed as first come, first serve, and lacked proper language access, more affluent neighborhoods disproportionately qualified for aid,” Menin said.

The council member also expressed concern that the practice of requiring a personal guarantee for another type of loan has placed a counterintuitive burden on small business owners. “It’s frankly shocking to me that the previous administration established a loan program to benefit small businesses in low-income neighborhoods and then created the possibility for these small business owners to lose their personal assets if they were unable to repay the loans,” she said. Personal guarantees are a common requirement, Kim explained, and there have been no defaults in the cases referenced by Menin.

Outreach As A Cure

One way of achieving greater equity could be the adoption of a wider array of languages in outreach efforts to small businesses citywide. SBS currently offers its services in nine languages; it’s been estimated that nearly 700 languages are spoken in New York City in total. “Our immigrant-owned small businesses found it very difficult to access government resources, services and programs in language-accessible, culturally-accessible ways,” said Queens Council Member Shekar Krishnan.

SBS is honing a particular focus on “supporting the hardest-hit New Yorkers, which include our minority and immigrant communities,” according to Kim. Using new and different means of communication — like texting or the popular Chinese social media app WeChat — is one way SBS envisions making its outreach efforts more successful. “These kind of language-accessible communication modes, how do we take advantage of that?” Kim posed.

Even business inspections could afford to take a more educational — rather than “punitive” — turn, Kim acknowledged. “Small business owners and economic recovery go hand in hand,” he said.

Sooner or later, tourists (and locals, too) will become essential to that equation once again. “We need to get people here,” Rigie said, “comfortable going out, eating, drinking, socializing, supporting these small businesses.”