Photo: Desiree Rios/The New York Times/Redux
At the start of the pandemic, when non-essential services closed their gates under a mandated lockdown, New York City moved quickly to launch a program to help small businesses stay afloat. In March 2020, even before the Paycheck Protection Program began, the city’s Department of Small Business Services opened applications to eliminate nearly $23 million in loans and nearly $25 million in grants. But a new report from the city comptroller showed that money wasn’t distributed equally across boroughs — and the Bronx fared the worst.
Nanette Burke, who has run a day care for 12 years from her home in the Edenwald neighborhood of the Bronx, closed her business for six months as COVID first swept through the city. He applied for the SBS bailout but was ultimately denied. “It was a struggle,” Burke said. “I lost all my revenue.” According to SoBro, a Bronx-based community development group, 40 percent of Bronx businesses closed during the pandemic.
The two emergency-relief programs were first-come, first-served, issuing loans to businesses with fewer than 100 employees and grants to businesses with fewer than five employees. According to the report, while Manhattan is home to 37.7 percent of the city’s small businesses with fewer than five employees, the borough received 63.1 percent of the grant money, which was primarily funneled into Chelsea, Midtown, Tribeca and Downtown. Meanwhile, the Bronx received 2 percent of the grant money, despite accounting for nearly 8 percent of eligible businesses. Similar geographic disparities were observed in the loan program.
The Bronx as a whole was hit hard by the pandemic. In the early months of COVID, data from the New York City Department of Health showed that the borough, home to many frontline workers, had the highest rates of COVID cases, hospitalizations and deaths. Last year, a state comptroller’s report found that the Bronx was the most economically affected of all boroughs, with the highest unemployment rate in the city. Burke said she saw that effect early, with many of the parents she works with still out of a job. She only managed to get by on unemployment benefits in the early months of the pandemic.
Part of the problem may be that many Bronx business owners were not aware of the programs existence. The comptroller’s audit suggests that SBS could have done more “targeted outreach” to make sure business owners across the city were aware of the program. “The city mobilized quickly to keep thousands of local businesses afloat, but poor administration of these programs meant that our public resources were not distributed equitably,” Comptroller Brad Lander said in a statement.
In its response to the audit, SBS wrote that at the time the programs opened, there was “no known geographic or industrial impact due to the pandemic,” which is why they operated on a first-come, first-served basis. It added that “new data shows that several areas of Manhattan that the comptroller said were ‘over-served’ by the program experienced some of the highest net-losses of businesses since March 2020 “
Burke says the effects of the pandemic are long-lasting – her day care is still not at capacity. “It’s a struggle all around,” Burke said. After learning about the disparity between boroughs, Burke says, “It doesn’t feel better.”