Vanessa Pugh has a message for small businesses impacted by COVID: When it comes to accessing financing amid the pandemic, which has hit some in the Black and Brown communities especially hard, there is help.
“My best hope is that people understand there are resources,” said Pugh, an independent contractor with the National Council, whose mission includes creating jobs through small-business lending.
No business is too small, said Pugh, a former deputy commissioner for Suffolk County Economic Development & Planning. And no situation is too dire.
For struggling business owners, this is a welcome message, although it may be something they must hear repeatedly before recognizing that trustworthy assistance is available. Some are so busy they don’t know where to turn for help.
“A business owner may be part of a one-, or two- or three-person team, and all of their blood, sweat and tears and work goes into running the business,” said Pugh, who now runs her own small business, Acts2 Consulting.
It’s a predicament that makes it hard to seek out solid access to capital, and even when owners do, there are applications to fill out, meaningful narratives to pull together and financial records to assemble. The process can get overwhelming, with the pandemic making it that much harder, particularly for women and minority-owned businesses, advocates say.
As businesses look toward economic recovery, 44 percent of small business owners have less than three months’ cash reserves, putting businesses and team members at risk in the event of a COVID-19-related shutdown or other emergency, according to a recent survey. Highlighting what could be an “uneven recovery,” the number was even higher, 51 percent, for Black-owned businesses. That’s according to Goldman Sachs 10,000 Small Business Voices, which polled 1,145 participants Aug. 30 through Sept. 1.
As for the outlook on access to capital, only 31 percent of the respondents said they were very confident they would get access to funding while only 20 percent of Black-owned small businesses reported being very confident in their access to capital.
This outlook is “extremely troubling,” said Matt Cohen, the president and CEO of the Long Island Association.
“It is imperative that we ensure they have the resources and support to weather this crisis,” he said. The LIA has “conducted outreach to small businesses during the pandemic and developed partnerships with organizations including the Long Island African American Chamber of Commerce and Long Island Hispanic Chamber of Commerce to ensure Long Island businesses can access loan and grant programs and receive technical assistance.”
And the “concerns for Black-owned business are still Covid-19 related as Black communities were disproportionately affected, and a level of hesitancy still persists in Black consumer confidence,” said Phil Andrews, Long Island African American Chamber of Commerce president.
Access to capital, he added, “remains a problem due to significant gaps in government programs designed to support economic recovery.”
In addition to access to capital, “policymakers should know that a significant number of small minority business owners need technical assistance” as well as “access to small business counseling” in order “to solve the complex needs of small business owners,” he said.
Still, there are “excellent” programs currently available, including through state and county resources, Pugh said. And owners disproportionally impacted by the pandemic may be able through the NDC to “borrow up to $100,000 with attractive repayment terms” and get hands-on assistance through the life of the loan,” she said.
Pugh’s role is to follow up with owners who are matched with an NDC program, and to discuss the terms of the loan and to see if they want to move forward. “Sometimes it takes 10 calls for money that’s available, that is a resource,” she said.
In a time of information-overload and misinformation, owners have their plates full, and may not see the opportunity.
Some may fall upon scams or get involved with loan programs where they might receive a quick surge of funds, but the terms turn out to be very unfavorable.
“Additional funding is not easy to come by,” said Leslie Tayne, founder of Tayne Law Group, a debt solutions law firm.
Traditional lending can be “a long process,” she said. “It requires a number of hoops to be approved.”
Owners with limited cash flow and insufficient credit history may be susceptible to unfavorable programs, she said.
Keeping up with payments in these instances can “hinder a business” and “choke them,” she said.
And, she pointed out, these kinds of programs are “not consumer-based loans,” and so they don’t come with the protections of the Fair Debt Collection Practices Act.
“It can be very abusive to the business owner,” she said.
Pugh said owners need to hear “trusted and valued voices” to recognize good opportunities.
Which is why finding trusted resources in the community is key. The LIA has a full directory of resources for minority businesses.
And there are venues and events where owners can speak with resources, as well as with peers about their experience with access to capital.
The Art of Giving & Ujamaa Fest, showcasing Black-owned businesses at the Plaza at Wyandanch on Sept. 25 from noon to 6 p.m., is one such opportunity. Dan Lloyd, the lead facility of the Babylon Industrial Development Agency’s Economic Inclusion Program, will be at the festival. He said he is eager to speak with people about the financial, technical and legal assistance the program provides to minority, women and veteran-owned businesses within Babylon Township.
“There are a lot of potential grants and low-interest loans available,” including through New York Forward through Empire State Development, he said.
He said the program recently partnered with Hofstra’s Ascend Long Island (where Pugh is also a consultant) to support marketing and technical assistance – addressing sales and profits, business growth and closure rates and more – for eight organizations.
And Pugh said that Boost Nassau Resource Center will help identify opportunities from “start to finish.” Another trusted voice for information, Pugh said, is the Minority Commerce Weekly published online by Jim Woods.
Lorraine Kennedy-Gayle, the owner of Island Jerk, with locations in Babylon and Wyandanch, said she swaps insights about access to capital with business owners. Through Suffolk’s Department of Economic Development, she was able to apply for the federal Paycheck Protection Program.
“The money came in a timely fashion,” she said, adding that without it, her business would have “not been able to survive.”
“I do share this with other business owners” who since found similar success, she said.
These kinds of efforts help owners find meaningful resources.
It’s with strong messaging, Pugh said, that will help experts “make sure they are getting the information to the people who need it most.”