Government Pandemic Relief Leaves Out East Harlem Small Businesses

Diana Larrazabal, owner of Aroma D’Angel on East 116th Street.

Diana Larrazabal, 40, owns the variety store Aroma D’Angel, on East 116th Street in East Harlem, and has been in a shuffle to keep on top of her finances since the pandemic hit. She closed the business for months at the start of COVID-19 lockdowns, moved the shop when she could no longer afford the rent, and tapped her savings while applying for government aid that ultimately never came through.

Her shop, like many businesses in the neighborhood, is so small that it falls through the safety net created by federal and state assistance programs.

For example, the $953 billion federal Paycheck Protection Program, designed to help small businesses during the pandemic, offered no relief because its loans depended on the number of employees. Like many storefront retailers, Larrazabal — who has none — didn’t meet the threshold.

“I know many who applied, but I don’t know anyone who got it,” she said.

That’s typical for local entrepreneurs, said Pablo Guzman, senior project manager at the Business Development Center of Union Settlement, an East Harlem nonprofit. “These are microbusinesses, not even small businesses,” he said.

The U.S. Small Business Administration defines microbusinesses as those with fewer than 10 employees, which are not the focus of aid programs. For the entrepreneurs of East Harlem, “if they employ 10, that’s like — they’re the rich people of the neighborhood,” Guzman said.

Larrazabal has owned small businesses all her adult life. Aroma D’Angel’s shelves are lined with jewelry, stuffed toys, trinkets and food storage containers. “I started a business to spend more time with my kids,” ages 10 and 16, she said, but the past year has been an uphill challenge. “When they want things, I tell them we have to ration and only buy essentials,” Larrazabal said.

Following a pattern of other neighborhood businesses, Aroma d’Angel, has continued to cut costs through cutting hours of operation. The storeIt opens later in the morning than before the pandemic “because there’s just not a lot of people walking like before,” Larrazabal said. Other stores have reduced the number of days that they do business, which has helped many business owners hang on, if just by a thread. “I haven’t really seen many stores close down,” she said.

A year and a half into the pandemic, funds are still being rolled out to business owners. In August, Gov. Kathy Hochul said New York State’s $800 million COVID-19 Pandemic Small Business Recovery Grant Program would expand to include businesses that make up to $2.5 million in revenue — previously, businesses couldn’t make more than $500,000 to qualify. 

Still, some East Harlem businesses fall through the cracks or fail to clear the hurdles to qualify. “Everything — starting from the paperwork required, to the terms and conditions — were tailored to medium-sized businesses,” Guzman said. Another obstacle is that many of the neighborhood’s microbusinesses pay employees off the books, and don’t have the paperwork to prove their need.

To qualify for a state grant, applicants must demonstrate their businesses showed a profit in 2019. That alone disqualified Illiani Quiroga, 56, owner of Azteca Western, a Mexican clothing store. “Many of the businesses here are not in the black, even before the pandemic,” she said.

Quiroga has kept the store open by halting purchases of new inventory. Meanwhile, she began offering new services, such as money transfers.

The Restaurant Revitalization Fund, which launched in April and attempted to prioritize minority groups, brought hope to the owners of some East Harlem eateries. However, it left out establishments that opened just before the pandemic because it required applicants to prove a loss in 2020 compared to 2019.

That excluded Barcha, a restaurant and bar that opened two years ago on East 115th Street. “How does a business that opened in late 2019 show a loss? It’s a mathematical impossibility,” said Gloribelle Perez, 37, Barcha’s co-owner. “All the bills continue as if there isn’t a pandemic, but the revenue has stopped.”

To stay afloat, Barcha has “pivoted at every opportunity,” Perez said. The restaurant expanded its online offerings to include wines and started using Google Analytics to design social media campaigns. Outdoor dining has not worked because of safety concerns related to a nearby bike lane.

Perez said she has written to government representatives about the predicament that businesses like hers face as they emerge from the pandemic. “Some were sympathetic,” she said, but “sympathy does nothing for my bills.”

Some East Harlem businesses did receive a lifeline from the $4 million East Harlem Small Business Grant. It was funded by the proceeds of a 2014 property sale and born out of a partnership led by District 8 City Council Member Diana Ayala, along with Manhattan Borough President Gale Brewer, the New York City Economic Development Corp. and Union Settlement.

Guzman, whose office administers the grant, said it was designed to be “super simple” and tailored to local needs, with straightforward requirements like proof of economic hardship and physical presence in the neighborhood. “Lawmakers in Washington don’t know them, but we know them and their families and their dogs,” Guzman said. Each business was eligible for up to $20,000.

Larrazabal, who received the local grant, said it helped her pay down some debts, but not all. “We still owe lots of money from the period that we were closed,” she said.

The local grant helped more than 300 businesses, Guzman said. Still, one in five East Harlem storefronts was vacant in December, according to a Union Settlement survey. It was the first year the survey was conducted.

Larrazabal regularly scans her inbox for announcements of new assistance programs. She subscribes to newsletters offering business advice. Since moving from her original location, she has been trying to recover former customers. Recently, in pursuit of new revenue, her shop started selling flowers. “We just don’t want to keep waiting for an answer,” she said.

Even without access to government assistance, shop owners insist on staying in business. 

“The only way these people can survive is to operate their own business,” Guzman said. “They will not find any other way to support themselves in this economy.”

About the author(s)

Dayana Mustak, a native of Malaysia, is a student at the Columbia Journalism School and an aspiring economics reporter.