Falling Through The Cracks – Brooklyn’s Service Businesses Worry About Survival

Brooklyn is rich in small businesses. But small businesses aren’t rich. Coronavirus is threatening the livelihoods of bars and restaurants, which have been shuttered to avoid spreading the virus. But another category of the small businesses that power the Brooklyn economy are personal service businesses like beauty parlors and barber shops that do not fall under traditional business models, and have been offered little, if any, support from the government.

They have not been ordered closed, yet. That may change by Friday. Governor Cuomo said Wednesday that “non-essential” businesses may be closed by the end of the week. That means “personal services” businesses, like Mrs. Althea Green’s Tia Salon on bustling Church Avenue in East Flatbush, would have to shut their doors. Hair salons and barber shops, along with beauty supply stores, abound in East Flatbush. Mrs. Green has operated her salon since 1999, surviving the Great Recession of 2008. She immigrated from Jamaica in 1983 and while it hasn’t always been easy, she has always survived.

But Ms. Green’s business is built on loyalty. As she says, “We live like family.” By ‘family’ she means the hair stylists, barber, and nail and eyelash technicians who rent a spot from her to see their clients. As such, she is not a business with “employees.” Like many community salons, she rents commercial space, pays the insurance, utilities and provides the chairs and other furniture. Beauty professionals rent, in turn, a spot in the salon from Mrs. Green.

Ms. Green’s livelihood depends on the success of her ‘family.’

Nydia Gonzalez is one of them, and has been beautifying nails since she was fifteen years old. For the last dozen years, it has been her sole source of income. While others travel from around the city to work in the salon, Ms. Gonzalez is an East Flatbush resident. Nydia doesn’t just give clients a manicure; she gives them art and design, from watercolored flourishes to glued gemstones. She is not a small business owner though.

Ms. Gonzalez is one of the lucky ones. She has clients who have continued to come to see her. That isn’t true for the stylists. Ms. Gonzalez, who pays $1,000 a month to Mrs. Green to rent her spot in the shop whether she has clients or not, does not know what she will do if the salon closes. Both women will need support.

The good news is that there are programs to help small businesses weather Coronavirus. The bad news is, these two residents weren’t aware of the programs and may fall through some pretty big cracks.

New York City is providing grants to help cover payroll for small businesses. But Mrs. Green has no employees other than herself. Neither woman has a “payroll.” There is also a zero-interest loan program, and that may help Mrs. Green, but not Ms. Gonzalez.

Brooklyn Congresswoman Nydia Velasquez, who Chairs the House Committee on Small Business, told participants in an online town hall on Wednesday, that she would fight for legislation to support a grant program for Small Businesses in the next Coronavirus package. Also, Congress is debating putting some cash back in the pockets of taxpayers, but whether that will be enough to carry residents like Mrs. Green and Ms. Garcia for the predicted 18 months of the virus is not clear.

Business owners looking for support can find more information on available programs below:

NYC Small Business Services Administration has two programs to help small businesses:

• The Employee Retention Grant Program: This program is available to New York City businesses
  with one to four employees that can demonstrate at least a 25% decrease in revenue as a result
  of COVID-19. Eligible businesses will receive a grant covering up to 40% of their payroll for two
  months. Businesses can access up to $27,000. Information on how to apply can be found here: https://www1.nyc.gov/nycbusiness/article/nyc-employee-retention-grant-program
• It has announced and will launch in the next week the Small Business Continuity Fund which will
  provide zero-interest loans of up to $75,000 for businesses with 100 employees or less. Small
  businesses are eligible if sales have decreased by 25%. A form to express interest is available
  here: https://www1.nyc.gov/site/sbs/businesses/covid19-business-financial-assistance.page
• The US Small Business Administration has announced a low cost loan program of up to $2 million for
  Small Businesses. https://www.sba.gov/funding-programs/disaster-assistance