For most New Yorkers, Manhattan is the city’s commercial heart. Its streets are crowded with small businesses – restaurants, retail establishments, and nonprofits – that serve a flood of tourists and locals of all hues.

But Brooklyn, and not Manhattan, accounted for the biggest number of recipients for loans under $150,0000, disbursed as part of the Paycheck Protection Program, a federal government initiative aimed at helping small businesses maintain payroll. New York’s most populous borough had 11,766 PPP recipients for loans in that range. With 11,125 recipients, Manhattan was a close second.

I went through data released by Small Business Administration earlier this month and tallied it against postal zip code definitions for neighborhoods in New York City.

Zipcodes comprising Manhattan’s Chelsea and Clinton neighborhoods, the nation’s largest business district, had the maximum number of PPP recipients for loans under $150,000. Geographically, they span a mostly commercial trapezoid piece of real estate that starts at Union Square and goes all the way to Midtown and Times Square. (For those wondering about Clinton, it is more popularly known as Hell’s Kitchen in NYC). Northwest Brooklyn, which includes the tony neighborhoods of Brooklyn Heights and Park Slope, was a distant second with 1,967 recipients. Manhattan and Brooklyn together had eight of the top ten zip codes of PPP recipients for loans under $150,000.

The story reverses when bigger loans, whose amounts were greater than $150,000 and went all the way to $10 million, are considered. Manhattan had more than double the number of recipients from Brooklyn for such loans. The borough had 3,286 establishments that were offered loan amounts greater than $150,000K while Brooklyn had 1,473 PPP recipients in that range.

Not surprisingly, zip codes within the Chelsea and Clinton neighborhoods were, again, ahead of the pack with a total of 1300 retail establishments from within that area receiving PPP aid. Northwest Brooklyn and Greenpoint ranked fifth and sixth respectively in the number of PPP recipients for loans over the mentioned amount.  

In both instances, Queens and the Bronx, the other two boroughs, trailed far behind. The two boroughs are comparable in size and diversity to their more well-known counterparts but had fewer PPP recipients, especially in their poorer parts.

Zip codes in Jamaica, not far from where the current President grew up in a palatial home, in Queens had a mere ten recipients for loan amounts over $150,000, making it the lowest such figure for loans in that range. At 227 recipients, the number of PPP recipients for loans under $150,000 disbursed to establishments in the same neighborhood was not terribly impressive either.    

What Do These Numbers Mean?

Of course, having more loan recipients does not necessarily translate to more cash for a borough’s establishments. By the end of April, approximately a month-and-a-half after the PPP program was announced, Manhattan accounted for 66 percent of the $8 million that had been disbursed from the program. In contrast, Brooklyn had received only 18 percent of that amount.

A more striking illustration of this trend is the case of businesses in the Gramercy Park and Murray Hill neighborhoods in Manhattan. Both are affluent places with a population that consists of both old and new money. Zero PPP loans for amounts less than $150k were made to retail establishments and nonprofits in the zipcodes comprising the neighborhoods. But the same zipcodes accounted for four hundred and sixty-four loans for amounts greater than $150,000.

The biggest story here, of course, is that of inequality. Rich neighborhoods benefitted more from PPP loans while poorer parts of the city lost out on government money. While government policy and disbursement mechanisms are important factors, the dynamics of running a business in poor neighborhoods with undocumented immigrants may also have something to do with it.

According to a report released by the Mayor’s Office of Immigrant Affairs in 2018, Queens had the highest number of undocumented immigrants and the Bronx ranked third. Tax returns and legal documentation, absent for most undocumented immigrants, are necessary pre-requisites to apply for PPP loans. There’s also the fact that small businesses in these neighborhoods prefer cash transactions because they cannot be traced and used to pay undocumented workers. The result is fewer workers on payrolls, which has the benefit of reducing their tax burden but also lessens their payout from PPP loans.

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