New York City was shut out of its fair share of federal payroll aid for small businesses while smaller states received proportionally more assistance, according to a report from city Comptroller Scott Stringer released on Wednesday.
In a press release on the report, Stringer noted that roughly 12% of the more than 1.1 million employee-based and non-employer businesses in New York City — which was severely impacted by the COVID-19 outbreak — received Payroll Protection Program loans from the U.S. Small Business Administration to cover payroll costs and other expenses during the pandemic, according to SBA data through June 30th.
In comparison, states like North Dakota, South Dakota, Nebraska, and Iowa saw more than 20% of their businesses receive a loan.
Stringer’s report said that of the 120,863 loans distributed to New York City employers, “the Bronx fared the worst: with a meager 40% of Bronx employee-based businesses being PPP recipients compared to 53% in Brooklyn, 52% in Manhattan, 50% in Staten Island, and 48% in Queens.”
He also noted the PPP loans were skewed by industry, leaving non-profits especially underfunded. Of the city’s 120,863 loans, retail businesses received the most number of PPP loans at 14,946 loans, followed by restaurants & bars which received 9,315 PPP loans. A Gothamist/WNYC analysis indicates the loans to the city’s restaurant industry totaled at least $1.3 billion, saving 109,000 jobs.
The SBA has issued $670 billion in total PPP loans to American small businesses with fewer than 500 employees, with nearly $38 billion in loans going to New York State businesses.
The PPP program was scrutinized in its first round after large businesses and institutions, including the Dig Inn Restaurant chain, the Central Park Conservancy and the Whitney Museum of American Art were loaned millions of dollars. Danny Meyer also took millions in PPP loans.
The average size of the loan in New York has dropped to about $76,000 in the second round of the PPP, down by $130,000, according to a Gothamist/WNYC analysis of SBA data. (New York Public Radio, the non-profit that owns WNYC and Gothamist, secured an $8.9 million PPP loan.)
“The PPP is an indisputable success for small businesses, especially to the communities in which these employers serve as the main job creators,” SBA Administrator Jovita Carranza said earlier this month, according to the Wall Street Journal.
Stringer also analyzed the industries of the 240,355 businesses with fewer than 500 employees who got the most PPP loans: almost every hotel in New York City (89%) received a PPP loan, 88% of manufacturing businesses, 66% of consulting firms, 60% of newspaper, book and directory publishers, and 59% of architecture, engineering and design small businesses received loans.
On the other hand, 24% of civic professional and advocacy organizations and grantmakers, 23% of nursing homes and mental health facilities, and 21% of social services received PPP, Stringer found.
“New York is contributing more to the federal government than nearly any other state, but Washington continues to return the favor at pennies on the dollar. In our time of need, Congress is failing to step up, ” Stringer said in a statement. “New York City is the economic engine of the nation and PPP loans should be a lifeline to our businesses that have been ravaged by the COVID-19 pandemic. But Washington has made it too hard for small businesses to access these PPP dollars, which means the small businesses that need help the most are getting shut out. Our analysis proves New York City’s workers and entrepreneurs have been shortchanged — especially nonprofits and outer-borough businesses that were hardest hit. The federal government must to step up to the plate and help New Yorkers get back on their feet — enough is enough.”
