Nearly three quarters of the city’s Minority and Women Owned Businesses (M/WBE) expect to shut down within the next six months if they can’t get work.
And while the coronavirus pandemic has been a massive hurdle, most say that a stacked system has also hampered their efforts to get financial aid and vital city COVID work that could keep them in business.
According to a just released report from City Comptroller Scott Stringer, 85 percent of certified M/WBEs report they cannot survive the next six months given their current cash on hand, and 30 percent of City-certified M/WBEs cannot survive the next 30 days or less.
The survey found that 60 percent of M/WBEs that competed for COVID-related city contracts were not able make contact with the city and only 10 M/WBEs actually received a contract.
“Minority and women-owned businesses are essential to our economy, generate strong local community wealth, are at the core of our city’s cultural identity and they are bearing the brunt of our economic crisis,” said Stringer.
“These findings are alarming and underscore the structural inequities facing M/WBEs and the urgent need for immediate action and relief before M/WBEs in our city are decimated. We will redouble our commitment to holding City agencies accountable and continue our efforts to identify and dismantle systemic barriers to participation. Our economy is strongest when it is equitable and inclusive, and our road to recovery must reflect those values.”
Based on survey results from more than 500 certified M/WBEs, the analysis revealed the coronavirus pandemic has cost each firm $38,000 in lost revenue so far. Over a third have not been able to operate during the pandemic and, of those who did compete for city COVID contracts, just 10 got the work and were contract for projects involving personal protective equipment, staffing, technology, medical supplies, sanitation, and design/build of COVID-19 testing sites.
When it came to getting federal, city and private COVID-19 relief funding, only 40 M/WBEs surveyed applied for the New York City Business Continuity Loan. Of the 40, only six were approved.
Only 48 M/WBEs applied for the New York City Employee Retention Grant. Of the 48, only 15 were approved.
One quarter of the firms surveyed did not apply for federal or City funding, citing barriers such as restrictive application criteria or use of funds, high interest rates, lack of outreach and awareness and funds being dried up by the time they applied.
According to Stringer, 20 percent of surveyed M/WBEs applied for federal or City funding but were not approved. 95 percent of surveyed M/WBEs did not receive private sector relief.
The surveyed firms said the city should try to level the playing field by placing W/MBE opportunities on every contract they issue, offer more flexible grants and loans for struggling firms and support to help them navigate grants, loans and city contracts.
The City has set itself the goal of awarding at least 30 percent of its contracts to M/WBEs by 2021.
Last year, the it doled out more than $30.5 billion in contracts to private businesses but just 4.9 percent of those deals went to minority- or women-owned businesses.