Summer 2020 was going to be a booming season for Giovy Buyers and her flower shop, Southern Blossom Florist. The Republican National Convention was coming to Charlotte, N.C., and she was bidding to do its floral installations.
We know how that story ends.
Instead, the coronavirus pandemic forced Ms. Buyers to close in March and lay off her three employees. On her last day, she looked around her shop, where cooling cases were stuffed with the flowers she imports from her home country, Ecuador, and decided to donate all of them to retirement homes.
When longtime customers began calling for funeral floral arrangements, she thought that work might help her limp through. But Ms. Buyers discovered her “supply chain was broken” — she could no longer import flowers.
Then two things happened. First, she found new suppliers, connecting with local growers who lost sales at farmers’ markets. Second, she heard that the City of Charlotte was offering grants to help small businesses pay their rent and other expenses. In July, she received $10,000.
“It was a real motivation for me to keep going,” Ms. Buyers said. “To be honest, before that, I was already thinking if things continue I was going to have to shut the shop.”
Across the country, local governments are sending out small lifelines like that grant to their small businesses even though their budgets are already devastated, with some cities expecting revenue shortfalls of 20 percent. But city councils, mayors and governors see this help as a matter of survival — especially with Congress still wrangling over a second stimulus plan — after an estimated 3.3 million businesses had to close their doors, at least temporarily, during the pandemic, according to a report by the National Bureau of Economic Research.
“They realize that it’s much easier to retain businesses and jobs than to let them fail and presume the economy will stitch itself back together,” said Joseph Parilla, a fellow with the Brookings Institution’s Metropolitan Policy Program. “What we learned from the great recession is that it is not easy for the economy to heal itself.”
So far, they have given out at least $5 billion in aid. They are squeezing the money out of their own limited budgets along with donations from corporate benefactors and philanthropic organizations. But the biggest source was the first stimulus package, the CARES Act. As part of that, Congress allocated $150 billion to states — and cities with more than a half-million people — to cover costs related to Covid-19.
Most places are using a portion of the stimulus funds to offer loans and grants, but others are more innovative.
Since pumping $30 million worth of grants and loans into the economy to help owners like Ms. Buyers, officials in Charlotte have put an additional $20 million toward their “thrive” phase. They created a work-force training program that promises jobs in advanced technology and renewable energy. So far, officials have secured 45 job placements and are working on 90 more. They are also offering grants for business innovation and subsidizing businesses to hire people who were laid off because of the pandemic.
“They are intervening in a way that improves the productivity of the business, not just meet the current moment,” Mr. Parilla said. “You want them to be successful in the new normal.”
In Akron, Ohio, the city government hired a tech company to develop an app that allows users to earn points — or in this case “blimps,” a nod to Akron-based Goodyear — by shopping locally. Blimps are redeemable for discounts at area businesses. So far, 125 businesses have signed up, and app downloads are double what was anticipated, city officials said.
“We all shop online. That’s just a way of life these days,” said James Hardy, Akron’s deputy mayor for integrated development. “But we hope we can take a fraction of that and show folks that we have locally owned retailers who can do the same thing.”
Mr. Parilla said one of the most robust pandemic responses he had found was in southeast Michigan and Detroit — a city that gets kicked in the teeth with regularity.
“Detroit had the infrastructure to have a better shot at being resilient when faced with a shock to the small-business sector,” he said. “Other cities are trying to do this, but the difference is they don’t have the institutions. They have to build them in real time.”
The center of that infrastructure is the New Economy Initiative, an organization founded by 10 philanthropic groups at the start of the last recession. Those leaders wanted to invest in entrepreneurship as a way of diversifying the economy to inoculate against future economic shocks. They tasked NEI with funding the groundwork of small-business development — like teaching people to write business plans — and having a pilot’s view of the entire network and its needs. Since 2007, it has invested nearly $100 million.
When the pandemic hit, NEI’s director, Pamela Lewis, intuited that it would disproportionately hurt Detroit because many of its businesses are Black owned, with fewer than 10 employees — exactly the type of firms that have limited access to banking and lending in good economies. And without those relationships, she knew access to federal relief funds would be a struggle for them.
Ms. Lewis began coordinating with local leaders right away and put $5 million in the response pot — including $2.6 million she raised in just two weeks. They used that money and additional federal relief to flood the economy with grants, loans and rent support.
The group formed a website, Detroit Means Business, to house all of the city’s pandemic response information. Included are industry-specific playbooks for how to reopen, downloadable signs, and details on getting curbside pickup street signs installed in front of a restaurant or expediting a patio permit to allow outdoor dining.
The group also got DTE Energy, the local utility company, to pay for free boxes of personal protective equipment to businesses with fewer than 50 employees — and passed out 3,000. DTE also paid for the city to hire a human resources firm to advise local owners.
The city and its partners raised $400,000 for its Feed the Frontlines program, which paid restaurants to make thousands of meals for essential workers. And they created the Digital Detroit course to teach businesses how to build websites so they could shift to e-commerce; more than 200 people signed up for the first cohort. The mayor ensured that all business owners and their employees could get free rapid Covid-19 testing.
In all, Detroit said, the group has invested nearly $33 million — much of it donated or from federal funds — to support more than 2,000 local businesses.
Ms. Lewis said she couldn’t imagine the alternative if they hadn’t been able raise money and distribute it quickly. Especially because a study by the Federal Reserve Bank of New York validated her early intuition. It found that Black-owned businesses had “experienced the most acute decline” from the pandemic: 41 percent of them had closed by the end of April, compared with 22 percent over all.
Nya Marshall is one of the entrepreneurs who have benefited from Detroit’s efforts. She opened her restaurant, Ivy Kitchen and Cocktails, in December and was just catching her groove after rehabbing her nearly 100-year-old building. The pandemic sent her revenue practically to zero. She didn’t know what to do for herself or her 23 employees.
But then she heard about the city’s support programs, took advantage of several of them, and got involved with Feed the Frontlines.
“Feed the Frontlines really helped with the morale of my business, because I was able to bring my team members back on,” Ms. Marshall said. “We were working for a collective cause, and they got a check from it, even though I didn’t earn any money. So that kept us going.”
That’s a relief to Charity Dean, who runs the small-business response to the pandemic for the city. She said keeping Detroit’s neighborhood businesses alive would require multilayered efforts.
“You can’t care about residents and neighborhoods without caring about small business,” Ms. Dean said. “For us, it was almost a time of creativity.”
It has also become a personal mission for Ms. Dean, who never expected to be in this role. After all, she is the director of the city’s Civil Rights, Inclusion and Opportunity Department, not an economic development expert. But it became clear to her that the city’s response had to focus on equity to help all Detroit businesses.
“Equity is at the core of what we’re trying to do,” Ms. Dean said. “When inequities are heightened by a crisis, you have the perfect storm to do something to fix it.”
Still, Ms. Dean and Ms. Lewis said they had much left to do. The grant and loan programs ran out before they could help every business — and they are uncertain what will happen if a second stimulus package isn’t passed or when cold weather comes.
“All of this still pales compared to the need,” Ms. Lewis said. “We haven’t touched nearly enough, and it’s just devastating.”