Columbia-Harlem Small Business Development Center Is a Lifeline for Business Owners

Sara Cravatts (Columbia Business School)
May 04, 2020

For many of New York’s small businesses, the COVID-19 crisis has been ruinous. But small businesses uptown may get some relief, thanks to the Columbia-Harlem Small Business Development Center (SBDC), which has jumped into action with resources, assistance, and guidance.

When you close your eyes and picture Columbia – are you doing it now? – you’ll see more than Alma Mater and the stately dome of Low Library. You might picture students walking down the sidewalk in Harlem, enjoying fresh doughnuts from the local bakery. Or you may see a professor quietly browsing the aisle of a small bookstore. You might even imagine your favorite mom-and-pop haunt where you yourself sat as a student years ago, a place that defined your Columbia experience. All of these places make up the fabric of the University – the small businesses surrounding the esteemed campus are what gives Columbia its soul, its culture, and its flavor. And now, the COVID-19 pandemic has put those very businesses in grave danger.

The Columbia-Harlem SBDC is one of almost 1,000 counterpart organizations around the country funded by the Small Business Administration (SBA) – funding is dispersed to states then allocated by region through local colleges and universities. Columbia Business School hosts the Columbia-Harlem SBDC, matching all funds provided by the SBA. During normal times, the SBDC provides guarantees for loans, one-on-one business counseling, technical assistance, and mentorship. Amidst the current health crisis, the SBDC has one main goal above all else: assist businesses in securing loans to stay afloat.

The SBDC is working with businesses to secure loans either through the federal government or banks. The School, as part of its Deans Summer Fellows program, is creating internship opportunities with SBDC for MBA students to counsel small businesses. It will also help facilitate a loan program funded by the University to offer additional aid to small businesses to reopen after the closures after lifted. The loan approval committee is made up of representatives from the Business School, including Gita Johar, Sandra Navalli, and Jack McGourty, as well as representatives from the University's general counsel and government and community affairs offices. The University is also waiving rent for two months for its commercial tenants.

The process of acquiring loans – and choosing the right type of loan – can be burdensome even during the best of times; navigating those steps during this unprecedented crisis has proven grueling for many. “A lot of what the Business School is doing is assisting businesses in thinking strategically about remaining solvent,” says Kaaryn Simmons, director of the Columba-Harlem SBDC. “Our role has been helping businesses figure out how they are going to move forward in a new economic climate.”

Simmons says that businesses currently fall into two categories: ones that have been deemed essential and can continue to operate, and others that have been forced to close. “For the businesses that have had to close, we are focusing on making sure that the employees and owners are taken care of and that some bills are being paid and expenses are reduced,” Simmons says. “For businesses that are operating, we have to help them figure out how to strategically change in order to manage in the new climate and keep revenue up.”

“Our role has been helping businesses figure out how they are going to move forward in a new economic climate.”

Kaaryn Simmons, director of the Columba-Harlem SBDC

The Columbia-Harlem SBDC typically provides one-on-one counseling to around 400 businesses per year— a caseload of about 30 clients per SBDC business advisor at any given time. During the COVID-19 crisis, each advisor is counseling almost 100 businesses. “They are pouring in,” says Simmons. “We are just trying to do triage and secure loan funds.”

The SBDC has created step-by-step guides on its website for how to apply to each type of loan, including overviews of each fund, comparisons between them, and calculators that help business owners understand how much they could be awarded. Recently, Umbrex, a management consulting firm co-founded by Will Bachman '04, joined in the efforts by offering a pandemic playbook on the website. Umbrex will also provide intensive pro bono consulting and industry-specific support through the SBDC.

Red Flower, a spa-products company in Harlem, was among the first to apply for and receive loan funding with guidance from the SBDC. “Their outreach helped us feel like there was a glimmer of hope and support for our employees and for the survival of Red Flower,” says Scott Kruger, Red Flower’s CFO and COO. “Personal phone calls and meetings allowed us to have stability in a time of uncertainty. After talking to the SBDC, we were among the top 1 percent of businesses who were able to get information in on time and receive a loan.”

Simmons stresses that keeping small businesses alive is crucial to the health of the entire community. “Our alumni and our community are very scared that our main street businesses will not reopen,” says Simmons. “Not only are they the stores and restaurants we have relationships with, but New York is the densest commercial area in the US, and if these storefronts are closed indefinitely, we will face major safety and real estate issues.”

“We have to make sure that Harlem is still a place students want to visit and live in, and those businesses are a big part of the neighborhood.”

Kaaryn Simmons

While New York has the highest density of commercial real estate of any state in the US, it received a disproportionately low amount of funding for Paycheck Protection Program loans and Emergency Industry Disaster Loans – despite also being more negatively impacted by COVID-19 than other states.

To make matters more complex, many of Harlem’s small businesses are headed by traditionally disenfranchised businesses owners, explains Simmons. “Men of color and women do not have the same relationships with banking institutions as other business owners,” she says. “We are very concerned about those businesses in Upper Manhattan because we have so many of them. We have to make sure that Harlem is still a place students want to visit and live in, and those businesses are a big part of the neighborhood.”

Business owners praise the SBDC for helping guide them through uncertainty. “The sense of unknown and the feeling of unfolding doom shifted for us in a way that would not have been possible without the outreach of the Columbia-Harlem SBDC,” says Yael Alkalay '97, CEO and Founder of Red Flower. “They offered a ray of hope.”

Simmons says the SBDC is doing everything possible to serve the community. “People are scared. The emotional aspect to this process is huge,” says Simmons. “Phone conversations that would typically take 90 seconds are taking an hour because people are breaking down when they call in – that is the biggest challenge we are having. If nothing else, we are trying to be a port in the storm.”

This article was originally published by Columbia Business School Ideas and Insight website on April 28th, 2020.