Today, New York City Comptroller Scott M. Stringer released a plan to make sure New York City’s small businesses get their fair share of Paycheck Protection Program (PPP) funding amid the ongoing economic distress of the pandemic. With the program now reopened, Comptroller Stringer outlined recommendations for the City to proactively help more small and immigrant-owned businesses apply for and receive this vital lifeline– including creating a multi-lingual community outreach team, partnering with non-profits and external stakeholders to increase awareness, and creating a comprehensive list of all the financial institutions administering the PPP so businesses know exactly where to go.
“New York City’s small businesses are struggling to keep their doors open and the lights on. PPP should have been a lifeline to these businesses, but they were drastically shortchanged,” said Comptroller Stringer. “Too few of our businesses were able to access the first round of funding – so we need to step up at the local level and use every tool at our disposal to proactively ensure our small businesses are not shut out of the next wave of PPP loans. The City should start implementing our recommendations immediately to make sure New York small businesses get their fair share of funding, can remain open, and our economic recovery stays on track.”
The Paycheck Protection Program was intended to support small businesses by helping them to retain staff and stem job losses amid the shutdowns and other disruptions in the early months of the pandemic. However, an analysis released by Comptroller Stringer found New York City lagged far behind in its share of eligible businesses that received a PPP loan. Just 12 percent of the more than 1.1 million employee-based and non-employer businesses in the city received a PPP loan, compared to more sparsely populated and less economically impacted states such as North Dakota, South Dakota, Nebraska, and Iowa, where more than 20 percent of businesses received a loan. The report also showed notable disparities between boroughs and industries receiving PPP loans, with non-profits getting minimal support through the program.
The Paycheck Protection Program reopened on Monday, January 11. Comptroller Stringer outlined the following recommendations to ensure New York City small businesses get their fair share of PPP loans:
- Build a multi-lingual, multi-ethnic team—modeled after the Tenant Support Unit—for proactive outreach and support, working with various ethnic and immigrant organizations to build capacity quickly.
- The City should compile and disseminate a comprehensive list of all the financial institutions that are administering the PPP so that businesses know exactly where to go and have the necessary contact information.
- The City’s Small Business Services, in collaboration with BIDs and other business associations, should create the NYC Door-to-Door Outreach Team and knock on the door of every commercial corridor business, reach out to proprietors, and help them prepare paperwork for the PPP program. They should also create a business hotline to help walk businesses through the application process, connect them to a lending institution, and to conduct phone outreach.
- In the first rounds of the PPP program, Minority Depository Institutions (MDIs) and Community Development Financial Institutions (CDFIs) proved highly effective at providing loans to small businesses. The City should work closely with these organizations to ensure that our small and minority-owned businesses are not left out in the latest round. The City should also provide funds to MDIs and CDFIs to hire experts in PPP paperwork preparation.
- While freelancers and other solo entrepreneurs were eligible for PPP loans, less than 5 percent received one. The City should work with the Freelancers Union and other relevant organizations to improve outreach and support.
- The City should amplify the PPP program at every opportunity, advertising the relaunch of the program on TV, radio, social media, and public transit and encouraging local businesses to apply.
As of December 30, 2020, small business revenue was down 67% in Manhattan, 43% in Queens, 38% in the Bronx, 37% in Brooklyn, and 28% in Staten Island compared to the first week of January 2020. According to Comptroller Stringer’s Save Main Street report, immigrant New Yorkers and communities of color have been hardest hit; 73 percent of Main Street jobs in New York City are held by people of color, 53 percent by immigrants, and 29 percent by non-citizens. An analysis by Comptroller Stringer estimated that the city would forgo at least $1.5 billion in taxable tourism sales for the next year.