On May 19, as reported by Norwood News, The Center for an Urban Future published a study that showed that Norwood was one of the City’s worst-hit areas economically by the pandemic and related shutdown.

 

About a week earlier, on May 11, Jonnel Doris was appointed as the Commissioner for the City’s Small Business Services (SBS) department. Previously, he served as the City’s first Senior Advisor and Director of the Mayor’s Office for Minority and Women-owned Business Enterprises (M/WBE).

 

The commissioner gave an interview to Norwood News in which he discussed his agency’s plan to get small businesses back in action as New York City prepares to re-open. The plan is based around three core principles – innovation, collaboration and adaptability.

 

“This crisis has taught us a lot of things – that no one is an island, and the fact that we all need to work together,” Doris said. “It’s kind of a new way to do business, a collaborative effort, not individual businesses.”

 

With his new appointment arriving at such a critical time, Doris said he is focused on ensuring an equitable recovery for all small businesses, while helping them to adapt enough to move and change with the times. He said the end goal is long-term sustainability.

 

In terms of innovation, paying people by check, rather than wire transfer in the midst of a pandemic seemed a very antiquated and slow way of getting cash to people and businesses when it was needed fast. Norwood News asked the commissioner, what his thoughts were on the delayed check debacle.

 

“Figuring out a way to use technology is always important, he said, adding that innovation with all necessary technological upgrades and platforms is also needed, as is ensuring his own agency’s program design doesn’t exclude anyone.

 

As reported previously by Norwood News, the federal paycheck protection program (PPP) is a forgivable loan program, launched to assist small businesses during the shutdown.

 

Doris said he was aware that some small businesses were unsuccessful with their applications for the loan program.

 

“I think the challenge that we saw was who was actually able to access those funds first,” he said, acknowledging that for businesses which had less than 140, less than 50, or less than 20 employees, the process was particularly challenging.

 

The PPP forgivable loan program was designed to provide a direct incentive to small businesses to keep their workers on the payroll for eight weeks, and to use the loan for payroll, rent, mortgage interest, or utilities.

 

According to the SBA website, loan applications had to be made through “participating SBA 7(a) lenders or any federally-insured depository institution, federally-insured credit union, or Farm Credit System institution”.

 

Other regulated lenders could issue the loans as well “once they were approved and enrolled in the program”. Small businesses were advised to consult with their local lenders as to whether they were approved lenders or not.

 

Of course, all of this caused huge delays and red tape in the midst of a crisis when people urgently needed access to cash, and many businesses were unaware if their banks were participating lenders or not.

 

Aora Estela Fernandez, who runs Mar & Tierra Bar & Restaurant on Bainbridge Avenue in Norwood said her situation has been untenable. Speaking in Spanish, she said her bank was closed initially during the early stages of the crisis when she tried to apply for the loan, and nobody was available to help or guide her as a result.

 

In the end, Fernandez said she was ineligible to receive either a loan or a grant, either because her business was too small to qualify, or she didn’t meet other requirements. She said, so far, she has received no help from the government.

 

Though her business has not closed completely, the bar is currently closed, and the restaurant is operating with reduced hours for deliveries only. Fernandez said she is struggling to pay rent since March, along with Con Edison bills and all her other expenses.

 

Meanwhile, the owner of a local dry-cleaning business in Norwood, who did not wish to provide his name, said the application process for funding during the pandemic was simply too long, complicated, and bureaucratic. He said he didn’t even try to apply, as he only has two employees, and he knew his application would not be approved.

 

He said he closed his business for one week during April and since then is only open from 8:00 a.m. to 3:00 p.m. He described his business as essential but said business was down 80-90 percent. “People are not going out, so they don’t have to dress up neither,” he said.

 

He hasn’t had to let anyone go, though he has suspended one elderly lady who usually does alterations as she didn’t want to chance coming to work during the pandemic as she is in the high-risk category. He as hired unemployed cleaners in her place to carry out any needed alterations.

 

When asked if he had applied for funding, he said, “With my current status, it’s not going to help. I’m not going to get it so what’s the point of going through it? I’m on the bottom part of the food chain, so I didn’t apply”.

 

Doris said he hears the concerns of such businesses. “When we talk about changing the way we do things, we have to start with the rules, the regulations, and the requirements that box some of our small businesses out,” he said.

 

“We want to know that whatever we do, we are being as inclusive as possible. I think that the program initially left a significant portion of businesses out that could not participate because of how the program was structured.”

 

According to the SBA, the definition of a small business is mostly based on average annual receipts, or average number of employees, but the definition of “small” also varies by industry, and the rules are not easily understandable.

 

This is especially so, considering 59.3% of Bronxites speak a language other than English at home, 35.4% are foreign born, only 72.5% have internet access, and only 19.8% have a Bachelor’s degree or higher, according to the latest census data.

 

We asked the commissioner if the worst hit areas of the City, like Norwood, would receive more funding to redress the economic imbalance.

 

Doris said his agency is doubling down on its resources, on its technical assistance and support services, and on outreach and communication with the affected communities so that they know that SBS is there to assist them.

 

“What this pandemic has done is reinforce existing disparities across the City,” Doris said. “Part of our job at SBS is to zero in on those disparities and to do all we can to ensure that economic opportunity is given to everyone, at every turn for folks to fulfill their financial potential, their entrepreneurial potential, and really, for every community to rise.”

 

He said part of the agency’s rethinking about innovation and adaptability is ensuring that resources are in the right place, and figuring out ways to collaborate with the private sector and philanthropic organizations.

 

“This is really a mission for them [philanthropic organizations], to correct the wrongs of the past, and ensure that as we move forward, everyone has a seat at the table, and everyone has a way to actually grow and thrive,” Doris said.

 

Norwood business-owners said they were especially interested in grants and forgivable loan programs, since many were not in a position to take on more debt, and traditional loans were not helpful to them.

 

Doris acknowledged the clear benefit of grants over loans. “At the City, we quickly stood up in our grant program, and we were able to utilize that program to reach a significant number of businesses across the city,” he said, adding that the program was intended as a stop gap to help small businesses keep afloat until federal funds arrived.

He said nobody really expected the pandemic would last for as long as it has. “Initially, the City set up two programs that totaled about $49 million, but because of the overwhelming interest, we had to pause those programs, and close one,” he said.

 

Under the NYC Employee Retention Grant Program, among other criteria, businesses, including non-profits, had to employ one to four employees, and had to have been in business for at least 6 months.

 

Under the NYC Small Business Continuity Fund, a loan program, among other criteria, businesses had to employ 99 employees or fewer in total across all locations, demonstrate ability to repay the loan, and have no outstanding tax liens or legal judgements.

 

In such uncertain, economic times, it was not always easy for businesses to meet these requirements, and though the local BIDs and Chambers of Commerce were on hand to proactively assist with applications, there was a long list of requisite documents, which were often difficult to furnish in the midst of the shutdown.

 

Doris said he hears those businesses who encountered difficulties and said the City was in the process of paying out the grants to successful applicants when the program got suspended. His agency then helped small businesses with technical assistance in accessing the federal fund program, which he said did indeed constitute a forgivable loan program.

 

“I think, we have to understand the enormity of this problem,” he said. “The City is right now looking at an eight point something billion in deficit. There’s a huge, huge cost to the economy here in the city.”

 

On the other hand, as of May 16, Doris said the federal program still had over 100 billion dollars available in it, and that those funds are accessible through contact with his SBS office.

 

“The federal response is really the only place where we can get $600-$700 billion into a program that helps small businesses nationally,” he said, adding that 281,000 New York State businesses received $37 billion from that particular federal forgivable loan program.

 

Though he didn’t have a breakdown of what percentage of that went to the City, as the data was not available, he said his agency knows a significant portion of recipients were small businesses.

 

Of course, the most pressing issue for Norwood businesses throughout the pandemic has been paying rent. Many were hoping their rent could either be cancelled or frozen.

 

“Certainly, we know that rent is a critical issue, particularly in the City,” Doris said. Under the federal government’s PPP forgivable loan program, only 25 percent could be spent on rent and other expenses, since the aim was to have businesses spent the remainder on payroll, to retain staff.

 

Doris said his agency advocated with federal partners to increase that threshold to 50 percent. “It goes back to how do we design these programs to make sure that they’re effectively reaching folks and businesses who need it the most,” he said.

 

Since we spoke with the commissioner, Norwood News reported that on May 27, the City passed legislation that does afford certain protections to commercial tenants from their landlords because of the difficulties they have faced during the shutdown.

 

On May 29, it was announced that Congress approved revisions to the PPP forgivable loan program with the “Paycheck Protection Program Flexibility Act.

 

If passed by the Senate, it will alter the original program, lowering the percentage of money required to be spent on payroll from 75 percent to 60 percent in order to have loans forgiven, thus allowing loan recipients to spend more of the funds on rent, utilities, and other business expenses.

 

Doris said that in addition to his agency providing legal services to small businesses for free, so that they can potentially negotiate rent with their landlords, through the agency’s Commercial Lease Assistance Program, it has also been working on ways to see how businesses can get assistance with rent deferral, abatement or reduction.

 

Finally, given that it has been argued that there has always been enough money in New York City to go around if the top one percent just paid more in taxes, we asked the commissioner if his biggest challenge will be accessing a big enough budget to meet the demands of small businesses or if there is some other constraint that he feels will limit him in his role?

 

Doris said, “If you are a small business owner, the greatest challenge you have is access to capital, access to startup capital, access to working capital, access to capital to advance and grow your business and to expand”.

 

He said his work at the M/WBE showed him that often times it was a question of the City providing a stopgap fund to smaller business owners who wouldn’t otherwise be able to access capital readily. He added that liaising with the private sector is also a way to achieving that.

 

Overall, Doris said he wants to make sure that small businesses have access to capital, access to government, and access to opportunity, and that all of that falls within the purview of what his department does.

 

His wish for small businesses to be flexible enough to adapt to change is certainly a worthy goal in terms of sustainability, and yet it is also somewhat telling of what may lie ahead. “Who knows if we will have another crisis?” he asked.

 

The Small Business Association is hiring and some of the job locations are negotiable.