We Need a Better Strategy to Save Women-Led Businesses—Now

The grants, loans, and relief programs on offer may look good on paper, but in reality, they are at best unhelpful, and at worst, will only serve to hinder businesses as they reopen.

By Jill Lindsey

Illustration: Perri Tomkiewicz

I am a small business owner in Brooklyn, who, after six years operating as a successful artisan department store and coffee shop, closed my doors last Monday and laid off three employees. It was a difficult and gut-wrenching decision that many founders are being forced to make as local businesses grapple with the aftermath of this pandemic, despite the government’s purported offers of financial aid.

I have spent hours reading through the guidelines of grants, loans, and relief programs that may look good at first glance, but in reality, are being drafted by politicians who have no experience running a small business—especially in one of the most expensive cities in the world. So what kind of financial relief will truly support the problem? How can the government actually help us right now? And where do the current packages fall short? I’ve done my best to answer below:

  • New York City is offering a grant to cover 40 percent of payroll for two months, capped at $2,500. The catch? Businesses must show a 25 percent drop in sales over last year for January and February. The problem? The virus didn’t affect businesses until March. For most businesses, sales in January and February were normal. This means that the majority of local businesses will not qualify for this grant—which, with its cap of $2,500, is still not enough to keep our staff employed.
  • The Federal Loan Program offers long-term loans with an interest rate of 3.75 percent, while New York CIty is offering zero-interest loans to businesses with 100 employees or less. This may appear to be a viable short-term solution for businesses that, though closed, still have bills to pay, inventory coming in, and current loan payments to make. But if this pandemic lasts another four months as predicted, small businesses will be dramatically affected when they reopen with mountains of debt, in a service-driven city that relies on in-person customers spending money. Come July, if customer spending is conservative, many businesses will have a hard time keeping afloat with this new debt.  Corporate companies are being considered for “bail outs” and small businesses are being offered debt, is that fair?
  • Many small businesses have had to lay off employees due to business closures. LLC business owners and Independent Contractors are not included in unemployment benefits; S Corp owners can apply, but usually get denied as they don’t have proof of salary. Not to mention in New York, small business owners contribute a percentage to the payout of unemployment, which again puts them in financial strain during a crisis. Unemployment benefits should be extended to all during this critical time.
  • The White House extended the deadline to file taxes until July 15. The problem? Most small businesses, adhering to the March 20 deadline to file quarterly sales tax, had already filed and paid their estimates. Thousands of businesses are now trying to have those payments cancelled. If the IRS honors the extension and cancels these payments, this will be a huge relief for businesses, enabling them to stay afloat, albeit temporarily, using that cash to pay bills and inventory.
  • Currently, there is no governmental policy on rent abatement. Rent relief, or rent abatement, would be incredibly helpful, not only for the months that businesses are closed, but for one extra month, once businesses are able to reopen. In New York State, a mortgage moratorium has instead been put in place. That means landlords and homeowners are receiving a break for three months, but renters are not. Representative Alexandria Ocasio-Cortez is currently in conversations with the state to push for a three-month rent suspension before April 1. Call, or text, your elected officials to make this happen.
  • Insurance provisions are also yet to be offered at a policy level. Currently, this is dependent upon each person’s commercial lease and contract as to whose insurance is triggered by closures arising from COVID-19: the landlord’s insurance, the tenant’s insurance or both policies. In the event that you do have applicable insurance coverage, expect delays in collecting funds.
  • The hospitality industry is still waiting on a government plan for restaurant relief, which is a tragedy for our service workers who are paid hourly and rely on gratuity to supplement their income. (Let’s not forget that most restaurant employees are minorities without savings or health care.) Some restaurants and cafes have started to sell their wine and milk inventory for half-off the menu price as a way to pay bills. For now, donation-based options (through Go Fund Me, Venmo, and Restaurant Workers’ Community Foundation) are being set up to disperse financial aid to employees. Rethink Food is also a wonderful non-profit organization that uses excess food to provide low or no-cost meals to New York City families in need, and right now they are renting closed restaurants to cook more food for people during this crisis. A quick tip: Restaurants can also donate their food to nonprofits for a tax write off.

The upshot is: I am scared to be one of the small businesses that won’t recover from this. People are the livelihood of my business; we offer (or should I say, offered) daily community events, classes, workshops, and fundraisers, creating an incredible community in the process. In a time where other retailers were focusing on internet sales, I went all-in on brick and mortar knowing the importance of that community for our customers.

The first time I walked back into my store after closing, it felt lonely. The space where children came for sing-a-longs, neighbors popped in for a gift, or friends met for happy hour wine in the garden is now empty. Seventy-eight percent of the products we sell also come from local small businesses; if I can no longer support them, they will struggle as well. Small businesses make our neighborhoods shine; they are the heart of our cities, they are where memories are made, experiences are had, and where connection is found. We need them now and forever.

But above all, we need a strategy to support small businesses now, while they are closed, and also once they reopen. Offering loans will, in the end, hinder our success and add more stress to our already strained financials. Instead, we need to ensure that our businesses will be fully protected not only through this pandemic, but for any unforeseeable future disasters. We need rent abatement. We need grants that consider location (some cities are more expensive than others) and a better timeline to report losses. We need current loan payments and bills to be deferred until after businesses reopen. We need an economic stimulus for a percentage of lost sales. And we need paid leave for all hourly employees both full and part-time. This is what support would really look like.

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