On March 30, REDC closed its first loan with a business owner in Flushing just days after launching its Emergency Small Business Relief Loan Fund.
According to AAFE, the group has received more than 400 requests for loans from businesses that have been forced to close or drastically downsize due to the crisis. It made multilingual interest forms available starting on March 18.
“COVID-19 is a public health emergency, but also an economic crisis unlike anything our small businesses have ever faced,” said Thomas Yu and Jennifer Sun, co-executive directors of AAFE. “Our essential small businesses need help right away if they are going to survive.
“This is why we launched the COVID-19 emergency fund,” they added, “to give business owners in our immigrant neighbors a fighting chance until government assistance arrives.”
The emergency fund provides businesses with immediate capital of up to $50,000 to make rent payments and payroll. While some businesses may eventually receive city, state or federal funding, the REDC loans will sustain them in the interim, AAFE said.
The loan is available to companies with 50 employees or less that can demonstrate at least a 25 percent drop in sales due to the virus. The company must be located in Manhattan Chinatown and Lower East Side, East Midtown, Flushing, Jackson Heights, Elmhurst, Murray Hill, Woodside, College Point, Bayside, Sunset Park, Bensonhurst, Bay Ridge or Sheepshead Bay.
Additionally, the loans have a fixed interest rate of 3 percent.
Though in-person meetings are typically required to close small business loans, REDC staff members adhering to social distancing orders have been working remotely. In the last two weeks, they devised a virtual system to meet with small business owners and complete loan documents through video conferencing and electronic signatures.
According to AAFE, more than $3 million has been raised by REDC’s partners, and $1.5 million in existing funding was reallocated to the emergency fund. AAFE also donated proceeds from its Lunar New Year banquet to the COVID-19 fund.
An independent group raised another $30,000 for the fund from more than 570 donors through a GoFundMe campaign.
AAFE and REDC are still seeking more capital to expand the emergency fund, the group said. The nonprofits are looking into offering loans through the Paycheck Protection Program, a part of the federal stimulus package, which provides forgivable loans to companies to keep employees on their payroll.
“Long before New York began shutting down to fight the coronavirus outbreak, our small business owners in Manhattan's Chinatown, Flushing and Sunset Park were pushed to the brink as their customer base all but collapsed,” said Jessie Lee, managing director of REDC. “Our team is working quickly to provide them with critical initial funding and to help open doors to other financial resources as they become available.”
The program’s first recipient was Lin Guo Yao, owner of Kyu Ramen in Flushing, which has been in business since last March.
The Japanese eatery and bubble tea shop was forced to scale back operations after the state issued an order banning dining in restaurants.
“Renaissance offered me an emergency loan in a really short period of time when the company needed the cash flow the most,” Lin said. “This emergency loan is like a gift in a most difficult crisis and solves our urgent needs.”