Photo: Desiree Rios/The New York Times/Redux
At the start of the pandemic, as non-essential services pulled down their doors under mandatory lockdowns, New York City moved quickly to launch a program to help small businesses stay afloat. In March 2020, before the paycheck protection program even began, the city’s Department of Small Business Services opened applications to provide nearly $23 million in loans and nearly $25 million in grant money. But a new report from the city’s comptroller showed the money wasn’t distributed evenly across the boroughs — and the Bronx fared the worst.
Nanette Burke, who has run a day care out of her home in the Bronx’s Edenwald neighborhood for 12 years, closed her business for six months as Covid first hit the city. She applied for an SBS bailout but was ultimately rejected. “It was a struggle,” Burke said. “I have lost all my income.” 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, providing loans to businesses with fewer than 100 employees and grants to those with fewer than five employees. According to the report, while Manhattan accounted for 37.7 percent of the city’s small businesses with fewer than five employees, the borough received 63.1 percent of grant funding, which was funneled primarily to Chelsea, Midtown, Tribeca and Downtown. Meanwhile, the Bronx received 2 percent of grant funding, despite accounting for about 8 percent of eligible businesses. Similar geographic disparities were observed in loan programs.
The Bronx was hit hard overall by the epidemic. In the early months of Covid, data from the New York City Health Department showed that the borough, home to many frontline workers, had the highest rates of Covid cases, hospitalizations and deaths. A state comptroller’s report last year found that the Bronx was the hardest hit financially of all boroughs, with the highest unemployment rate in the city. Burke said that while she has seen much of the impact firsthand, many of the parents she works with are still out. She only managed to get by in the early months of the pandemic through unemployment benefits.
Part of the problem may be that many Bronx business owners didn’t know the programs existed. The comptroller’s audit suggests SBS could have done more “targeted outreach” to ensure 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 our public resources were not distributed evenly,” Comptroller Brad Lander said in a statement.
In its response to the audit, SBS wrote that at the time the programs opened, there were “no known geographic or industrial impacts due to the pandemic”, which is why they were operating on a first-come, first-served basis. It adds that “new data shows that many areas of Manhattan that the comptroller said were ‘over-served’ by the program experienced some of the highest net-losses since March 2020.”
Burke says the effects of the pandemic are lingering — her day care is still not at capacity. “It’s a struggle all around,” Burke said. Noting the disparity between the boroughs, Burke says, “It doesn’t make it any better.”