If a survey that City Comptroller Scott Stringer conducted is any indication, minority- and women-owned businesses (M/WBEs) across New York City are having the most difficult time weathering the economic storm wrought by the COVID-19 pandemic.
Stringer announced Friday the results of a survey of more than 500 M/WBEs across the five boroughs, which concluded that 85% of owners indicated they won’t be able to survive the next six months with their current resources. Thirty percent of respondents indicated they may not make it past the next 30 days given the economic hardship.
The economy was already heading south when the COVID-19 pandemic officially arrived in New York in March. Deprived of customers after capacity decreases and shutdown orders took effect, non-essential businesses had no choice but to close indefinitely — many of them for good.
But businesses owned by women and people of color bore the brunt of the economic downturn. To make matters worse, Stringer said, these businesses also had even greater difficulty procuring economic aid once it became available.
Stringer’s survey found that just 40 M/WBEs had applied for the New York City Business Continuity Loan, which provided up to $75,000 for a business that lost 60% of its revenue during the pandemic. However, only six of the 40 applicants were approved.
Forty-eight M/WBEs sought the New York City Employee Retention Grant, which provided small businesses with loans to retain their employees if they had lost 25% of their business. Stringer said that just 15 of the surveyed applicants received the grants.
Moreover, a quarter of all surveyed M/WBEs never applied for federal or city funding at all. Stringer said the respondents cited barriers such as restrictive application criteria, high interest rates, lack of outreach or awareness, and the exhaustion of available funds by the time they submitted their application.
Twenty percent of the surveyed M/WBEs said they were denied approval of federal or city funding due to reasons such as a low credit score, restrictive criteria or exhausted available funding. Some said they were rejected, but never provided an explanation as to why.
“These findings are alarming and underscore the structural inequities facing M/WBEs and the urgent need for immediate action and relief before M/WBEs in our city are decimated,” Stringer said in a July 10 statement. “We will redouble our commitment to holding city agencies accountable and continue our efforts to identify and dismantle systemic barriers to participation. Our economy is strongest when it is equitable and inclusive, and our road to recovery must reflect those values.”
The comptroller said he would revise the contract registration process to include “new transparency and accountability measures … requiring the city to provide documentation, such as goal-setting worksheets and market analysis, on M/WBE goals in city contracts.”