Small Businesses Describe Their Difficulties at Legislative Hearing
Natasha Amott (left), who runs Whisk, a kitchen accessories store in Brooklyn, and Jeff Knauss, CEO of Digital Hyve, a small business assistance company, based in Syracuse, were among those who testified remotely during the hearing. Photos: Karen DeWitt
May 14, 2020 –
The New York State Legislature on Wednesday took one of its first official steps since the state budget passed over a month ago. They held a public hearing – remotely – on the impacts of the COVID-19 pandemic on small businesses and how the federal government has responded.
Before taking testimony, the hearing began with a minute of silence for the more than 22,000 New Yorkers who have died of the disease.
Two of the senators who attended the hearing, Democrat James Skoufis of the Hudson Valley and Republican James Seward of Oneonta, had COVID-19 and recovered.
Small business owners, including restaurateur Carlos Suarez, testified at the hearing about the difficulties they have endured in obtaining federal assistance, including the Paycheck Protection Program, or PPP, loans and other loans through the Federal Small Business Administration.
Suarez said the federal government’s response could be summed up in three words: “Chaotic, flawed and inadequate.”
He had four successful restaurants in Manhattan’s Greenwich Village. Initially they tried to offer take out service, but they are now closed and most of the employees have been put on leave.
Suarez said he received the PPP loan, but it expires in four weeks. He would like to see it extended to 24 weeks and have a longer period to pay it off. Currently, loan recipients have a six-month grace period and are then required to repay the loan over a two-year period.
Otherwise, he said, he and other owners of the financially devastated restaurant industry will be in even more debt.
“It’s tax suicide,” Suarez said.
Natasha Amott, who runs Whisk, a kitchen accessories store in downtown Brooklyn, also spoke at the hearing.
She received a PPP loan in the second round, but she said the program was fundamentally flawed. When it was designed, it was assumed that many businesses would remain open, even if their sales were reduced, and that the economy would be fully open again by the end of June.
The loan is fully forgiven if the business owner retains his employees and uses 75% of the loan for payroll. But Amott said retail stores like hers have been closed and she has had to put most of her employees on leave. She converted her business to selling online, but said it was expensive and inefficient.
“It’s so expensive,” Amott said. “There are inevitably shipping issues, with USPS or FedEx.”
Amott said when the time comes to reopen and rehire his employees, some of them might not want to return right away. The federal CARES law provides $ 600 per week in unemployment insurance, in addition to state unemployment benefits. She said some of her employees are making more money with both programs than they could if they returned to work.
“And if we are not fully operational by the end of June, they will again be facing time off,” Amott said.
Lawmakers have also heard of two businesses in the upstate that are facing challenges.
Jeff Knauss is the CEO of Syracuse-based Digital Hyve, which helps other small businesses navigate social media marketing. He said the company plans to expand to Rochester and Buffalo this year, but its growth projections are now 66% lower than they originally planned, and that growth has continued. “suddenly arrested”.
“Many of our customers have been deemed non-essential, such as car dealerships, small estates, casinos and the like,” said Knauss, who added that they had been forced to shut down “and therefore stop spending money. ‘money in advertising’.
He said he got a PPP loan, which he said saved his life, and was able to keep his staff. But he also said the loan should be extended for a longer period. He said he expects his business to continue operating at a fraction of its old rate, and he expects his staff to be able to work from home until 2021.
Robert Stark of CJS Architects in Buffalo also said the PPP loan was vital to his business. He said he tried to get additional loans from the SBA, but never got a response from the agency.
Because architects work with construction companies, he might be allowed to reopen sooner than other small business owners. The first phase of the regional openings outlined in the state plan includes construction and manufacturing. Stark said it couldn’t happen soon enough.
“I don’t think it’s sustainable,” he said.
Western New York has yet to be cleared to reopen.
Small business owners said there were several things state lawmakers could help them with. First, they must have access to personal protective equipment for their employees when they start to reopen. Amott and the others said it was difficult to locate the masks and hand sanitizer.
“It’s just exhausting,” she said. “I barely live on sleep.
They would also like to see unemployment insurance rules changed. Right now, the rate a company pays is based on the number of workers it has recently laid off. They said they shouldn’t be penalized by higher rates for putting workers on leave after shutdown orders.
They also said they needed help paying the rent. The reduction in business activity over the next few months will leave them little money to pay business owners. They would also like to see their payroll taxes lowered and, finally, they want the state government to encourage purchases from local businesses. They said otherwise, Amazon and big box stores could oust them altogether.