And then there's the Small Business Administration. Or rather, there isn't the Small Business Administration. Yes, the SBA is making emergency loans. But who gets them? As Herbert Austin, acting director of the SBA's New York district office, explains it, the agency must protect taxpayers' money and therefore lends only to those companies it feels have a fighting chance of paying the loans back. "On a personal level, we worry about adding more debts to companies that are hurting so much already," says Austin. "We were ill prepared for this. If we were prepared, maybe we would have had grant programs in place."
Some companies have been approved for loans, despite the fact that most businesses in the area are hurting for customers. But even those that are approved face another problem. The SBA feels that if it is taking the risk of making a 4%, 30-year business loan with no payments required during the first two years, it's entirely reasonable to look for some collateral, usually a home. That may work for people affected by a flood in North Carolina, but many people in New York City don't own their own homes. Austin says that a lack of collateral will not automatically disqualify a borrower. But Chapman, who is a single parent with two children, says she was turned down by the SBA for just that reason, as were a number of other small-business owners in the area.
Those who do own homes, like Yagudayev and Pehr, are loath to put them at risk, particularly if they have already paid off their mortgages. If the loan amount is large enough, some may find the risk worth taking. But for others it's a terrifying decision. Ask di Tillio from Majestic Pizza whether he's going to take the $100,000 SBA loan he has been offered and he becomes very somber. He points to the black skyscraper across the street. "That's half full," he says. The one next door has fewer than one-third of its floors occupied. Even though he's now staying open Saturdays and Sundays to try to raise his income, his business is still running at about 45% of what it used to be. "I'm a little scared to take the loan," he says. "God forbid if I can't make a business of this."
Complicating matters further are two requirements that seem right out of Catch 22. One of the provisos stipulates that any money a business receives from its insurance company or as a grant must be turned over immediately to the SBA to pay down the loan. So there's no way companies can assemble survival packages from multiple sources. The second proviso says that insurance money and grants are considered taxable business income. So just as your SBA loan is being reduced, you may have to come up with money to pay taxes on what you've received from other sources. "The SBA isn't geared up, in terms of their legislative mandate or their way of life, to support this kind of disaster," says the Alliance's Weisbrod.
So what's a small business that is badly hobbled by 9/11 to do? Surprisingly, few owners are ready to throw in the towel. Some are hanging on because they're determined to participate in the rebuilding process. Others are fighting because they simply can't accept that they've been cast aside so thoughtlessly. Duane Anzalone used to own a restaurant called St. Charlie's just south of the World Trade Center. He'd started working there as a food runner 20 years earlier, finally purchasing the restaurant from the owner three years ago with a partner. In the days immediately after the towers collapsed, his restaurant was used freely by rescue workers. Photographs of the restaurant taken several weeks later showed a place that had been utterly trashed by looters. Despite articles in the New York Times and elsewhere highlighting his plight, Anzalone has never been offered any compensation by the city, by the Federal Emergency Management Agency, or by relief agencies. The only grant he received from the government to cover his economic losses came to $43,000.
As Anzalone shows me around his former establishment, he fights to keep his composure. Yet he wants to reopen another restaurant in the same neighborhood. He still has many loyal customers, he says, and this is what he knows how to do best. More than that, he says, he feels an obligation to his children. "I hate to have my kids watch me not go to work. My son has seen me get pushed around. It makes me feel like I'm a coward and like I can't stand up for myself. I'd like to be able to stand up, just for them."
When Anzalone does reopen -- and I believe he will -- he's already got one new customer.
Sarah Bartlett is a freelance writer and journalism professor who has lived in Tribeca, just north of the World Trade Center site, for more than 20 years.
How to Help
Want to offer assistance to small-business owners in the Ground Zero area? Here are some organizations to contact:
From the Ground Up
28 Vesey St., #2402, New York, NY 10007
www.nyfromthegroundup.org
A nonprofit advocacy group focused on reforming the way that financial assistance is distributed to small businesses. It has just set up a foundation to distribute donations directly to its members (www.ftgufoundation.org).
Seedco
P.O. Box 9686, Uniondale, NY 11555
www.seedco.org
A national nonprofit with a Lower Manhattan initiative that provides financial and technical assistance to small businesses there. Contributions to the Seedco WTC Small Business Fund are tax deductible. Checks can be written to Seedco WTC Small Business Fund. Contributions also can be made on-line.
Adopt-A-Company
Contact Priscilla Alejandro at 212-618-5767
www.adopt-a-company.org
A clearinghouse created in conjunction with the New York City Economic Development Corp. that allows companies or individuals to "adopt" one or more businesses directly affected by 9/11. The entire program is on-line, and the terms and the extent of the adoption are left up to the sponsors and adoptees.
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