The coronavirus pandemic has had a serious impact on small businesses all over New York. Those in non-essential industries have had to transition their operations online or close down. Restaurants and other foodservice businesses have converted to take-out or delivery only, which may allow them to remain afloat but forces them to lay off a lot of their staff.
If you own a small business in New York City, then there are city and federal programs that may be able to assist if you’ve experienced a financial downturn due to the pandemic.
New York City Small Business Continuity Loan Fund
The New York City Small Business Continuity Loan Fund provides zero-interest loans to businesses that have lost at least 25% of their revenue and have fewer than 100 employees. You will need to present documentation showing your revenue for two months in 2020 and the same two months in 2019 to show income loss.
As of May 10, applications have been paused temporarily, but may resume soon, so continue to check the link above.
Private sector loans
Small business loans are also available from private sector sources like the following:
- The NYC COVID-19 Response & Impact Fund provides loans to city-based nonprofits. Priority is given to businesses that provide essential food and healthcare services as well as arts and culture support.
- Nonprofit organization Southern Smoke provides financial assistance to restaurants and their employees. To qualify, employees must have worked in the food and beverage industry for at least six months for an average of 30 hours per week minimum.
The following federal programs provide COVID-19 relief for small businesses:
- The Paycheck Protection Program helps businesses with fewer than 500 employees cover their payroll during the crisis. These loans, which are available for up to 2.5 times your monthly payroll or $10 million (whichever is less), are 100% guaranteed by the Small Business Administration (SBA).
- Economic Injury Disaster Loans provide an advance of up to $10,000 to agricultural businesses that have lost revenue due to the pandemic. This advance will not have to be repaid, according to the SBA website. The limit is $1,000 per employee up to ten employees.
- SBA Express Bridge Loans allows businesses that currently have a relationship with an SBA Express Lender to quickly access up to $25,000 to overcome temporary revenue loss or bridge the gap while they apply for an SBA Economic Injury Disaster loan. The amount provided will be repaid in part or in full by the EIDL loan.
If your business was experiencing financial difficulties before the pandemic, then these loans can help restore stability, but for some enterprises, it may not be feasible to continue. A remote consultation with a New York bankruptcy attorney can help you decide whether Chapter 7 is the best course of action. Your business would have to close, but once it’s over, you can take any lessons learned from your earlier difficulties and increase your chances of success the second time around.