Established and thriving businesses were in need as much as newer businesses at the onset of the COVID-19 pandemic as seven in 10 Newark businesses applied for relief through the city’s COVID relief fund, according to the COVID-19 Emergency Small Business Grants Program 2020 Report released by the United Way of Greater Newark Tuesday.
Additionally, three in four Newark small business owners were unsure if they can pay their rent anymore according to the report, a first-ever for the UWGN that detailed the pandemic’s economic impacts on small businesses nationwide and in Newark.
The report also offers a framework for the next steps for rebuilding as Newark faces a long road to recovery.
Earlier this year, UWGN partnered with the City of Newark and Invest Newark to launch its COVID-19 support fund. Together, they developed an Emergency Small Grant Program to aid small businesses and microenterprises with losses they had experienced such as loss of income, payroll loss, and sales.
UWGN has received more than 900 applications and awarded over $1 million to Newark-based businesses.
“The pandemic has had a devastating impact on our hardworking residents and small business owners in Newark and across New Jersey, and we know that the economic impacts will be long-lasting and widely felt,” said President & CEO Catherine Wilson in a prepared statement.
“With this first-ever report, our goal was to offer deep insights into the economic impact of the pandemic and the sectors and industries that were impacted most,” Wilson said. “We’re grateful to the City and Invest Newark for their partnership and are looking forward to working diligently to provide more targeted relief and solutions to those who need it most.”
UWGN, Invest Newark, and the Baraka administration created the Emergency Small Business Grant partnership to help keep local enterprises afloat before federal relief funds became available.
“As shown by this report, the COVID-19 pandemic has had an outsized impact on small businesses across Newark,” said Invest Newark President and CEO Bernel Hall. “Through the collective partnership on the Community COVID-19 Fund, we have been able to quickly create and mobilize resources to support Newark small businesses through the pandemic. But that work isn’t done yet. Through the COVID-19 Emergency Small Business Grants Program 2020 Report, we have better data and tools to continue our work together with United Way of Greater Newark to chart a path to help lift up our city’s small business economy.”
The application for the grant, primarily designed for small businesses with fewer than 10 total employees, required businesses to answer questions about their business; and the findings illustrated in the report demonstrate the severity of COVID-19 on small businesses in Newark.
The most applicants reported the following experiences related to COVID-19: inability to pay bills or fees (78%), lack of cash reserves (74%), decrease in number of customers (68%), disruption in operations due to an order by the City of Newark (67%), and temporary closures (67%).
More than half of applicant businesses were minority or person of color owned (59%), locally-owned (58%), and woman-owned (54%). More than one in four (27%) are immigrant-owned.
The report also offers next steps for future rounds of funding as well as future strategies for rebuilding Newark’s small business economy long term. All small businesses need to manage their cash flows, the report suggests, as even in a strong economy, small businesses face irregular cash flows. For relief, targeted interventions may be needed for sectors that were hard hit due to social distancing challenges, such as personal services and restaurants.
Targeted interventions may also be needed for businesses owned by harder hit demographics; and downstream businesses affected by others’ cost cutting measures should be looked at as well.e