In addition to its global impact on public health and safety, the COVID-19 pandemic sent economic shockwaves throughout the world. According to the Bureau of Economic Analysis, the United States’ Gross Domestic Product contracted by 3.5%, the largest contraction since 1946, and suffered the highest inflation rates in more than 30 years.
The economic effects of the pandemic were particularly intense for small businesses. According to the Small Business Administration (SBA), more than 51% of small businesses were negatively impacted during the height of the pandemic. Data compiled by the U.S. Census Bureau’s Small Business Pulse Survey (SBPS)—which was launched in 2020 to produce real-time data on specific challenges small businesses were facing due to the Coronavirus pandemic—found on average that during the pandemic more than 40% weathered declining revenues; more than 41% of small businesses experienced temporary closures; and nearly 45% faced supply chain disruptions.
Of the more than six million small business that have paid employees (known as “employer firms”), more than 18% are minority-owned. About 29% are family-owned “Mom and Pop” businesses that usually employ no more than 10 people. They are comprised of a diverse array of socio-economic backgrounds. For instance, SBA indicates that almost one in five employer firms that are small businesses are immigrant owned. Many can often also experience difficulty accessing capital and credit.
Community Development Financial Institutions (CDFIs) have a long history of business and microenterprise lending in distressed and underserved communities. Since 2010, CDFI Fund CDFI Program and Native American CDFI Assistance Program (NACA Program) Financial Assistance recipients have made in excess of $38.2 billion in business and microenterprise loans to finance nearly 585,000 businesses. During the pandemic, CDFIs served as a powerful resource to ensure the survival of many small businesses in underserved communities. For example, nearly 70% of Paycheck Protection Program (PPP) loans originated by CDFIs went to businesses in minority communities.
One such CDFI is Renaissance Economic Development Corporation (Renaissance)—a Certified CDFI established by Asian Americans for Equality (AAFE)—with a mission to support low-to-moderate income and immigrant communities in New York City by providing low-interest small business loans, training, and counseling services. During the pandemic, Renaissance launched an Emergency Small Business Relief Loan Fund for small businesses, dispersing $3 million to 157 businesses. Renaissance also facilitated $3.2 million in PPP loans to 180 small businesses and administered $2 million in emergency grants to small businesses. In addition, Renaissance:
- partnered with the Queens Small Business Grant Program to help administer $2 million in grants to low- and moderate-income communities in Queens, NY;
- assisted 200 businesses in applying for New York State Small Business Grant Recovery Program funds; and
- partnered with Citizens Bank and LISC to launch the Citizens Chinatown Renewal Fund in New York City for which Renaissance administered $220,000 in grant funds to 22 businesses, as well as providing technical assistance to 100 businesses in New York City’s Chinatown area.
In addition to providing capital to businesses impacted by the COVID-19 pandemic, Renaissance translated government COVID-19 information into Chinese, Korean, and Spanish for its client bases that primarily consists of immigrant-owned small businesses. Renaissance conducted webinars in multiple languages on an array of topics including applying for PPP forgiveness, digital marketing, ecommerce, business cash flow analysis, debt relief, and bankruptcy. Renaissance also provided one-on-one counseling to over 3,000 small business owners during this critical time-period.
“The pandemic exposed for everyone to see the importance of small businesses in underserved communities, as well as the challenges in helping these businesses access capital, especially in times of crisis,” said Thomas Yu, Executive Director of Asian Americans for Equality. We were proud to work with the CDFI Fund and other federal government agencies to make sure our affiliate, Renaissance, was in position to help immigrant small businesses survive. And we’re looking forward to continuing to partner with the CDFI Fund to provide equitable small business funding to our under-resourced communities.” Small businesses that have benefited from Renaissance’s assistance include:
Ziggle Tofu & Grill – The husband and wife team of Jaeyeon and Hyo Jung Kim, Korean immigrants, are the proud owners of a successful restaurant in Queens, NY. They were preparing to open their second restaurant, in Long Island City, New York when the pandemic struck. They struggled with the economic pressures brought about by the pandemic and the resulting difficulties to secure working capital that most small businesses face. Fortunately, the Kim family was able to secure a working capital loan from Renaissance to support the new restaurant’s start-up phase. This enabled them to open their second restaurant in October 2021.
Jaeyeon and Hyo Jung Kim
SVG Caribbean Bakery & Restaurant (SVG) – Zita Telemaque-Williams and Samuel Williams opened SVG to share the foods of their Caribbean culture with their community in Brooklyn, NY. The early days of running the restaurant were difficult as the family experienced difficulty obtaining conventional financing. In 2018 with a referral from NYC Business Solutions, the family went to Renaissance where they received technical assistance and a $25,000 working capital loan that they used to purchase inventory and hire additional employees.
SVG continued to be successful until the pandemic hit. Past experience sent them back to Renaissance for emergency assistance in May 2020 and February 2021. Renaissance provided SVG with two PPP loans totaling over $22,000. The Williams family is also participating in Renaissance’s Local Business Digital Transformation Program, launched with support from Wells Fargo. The program provides small businesses with the specialized assistance needed to grow their online presence and better utilize digital tools to expand their customer base and increase sales.
Olive Market – Song Ku Paek opened Olive Market, a neighborhood deli and grocery in Queens, NY. After being turned down for a commercial bank loan, he came to Renaissance in search of startup capital to realize a lifelong dream of owning his own business. He received a loan to help open the grocery, which became a go-to spot for the local community. During the pandemic, the business experienced a dramatic decrease in sales, threatening Olive Market’s survival. Working with his small business counselor at Renaissance, Mr. Paek received two PPP loans, an Emergency Small Business Relief Loan, and one-on-one technical assistance from Renaissance.
For more information, go to Renaissance - Your Community Business Partner (renaissance-ny.org).
Gail Thomas is a Communications Specialist with the CDFI Fund.
 Census Bureau defines small businesses as single business locations with one to 499 employees and at least $1,000 in annual revenue.