20:55 GMT30 October 2020
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    Bankruptcies in the New York City region have spiked by 40% during the COVID-19 pandemic compared to the same time period last year, according to a new report by Bloomberg.

    The pandemic has resulted in almost 6,000 business closures across all five New York City boroughs between March 1 and September 11. Around 4,000 of those businesses have closed permanently. 

    Between March 16 and September 27, more than 600 businesses filed for bankruptcy in the Southern and Eastern Districts of New York alone. 

    According to Bloomberg, the city’s Department of Small Business Services has also received around 35,000 calls since June from small businesses seeking help. The organization has already given out at least 4,000 grants and loans to struggling businesses.

    “A third of our small businesses could be closed if we don’t have a strong recovery,” Jonnel Doris, the department’s commissioner, told Bloomberg. “The fate of small businesses will determine the fate of the city.”

    “It’s a crisis, and we need to act - our economy can’t recover without saving small businesses,” New York City Comptroller Scott Stringer added in an interview with Bloomberg. “When they close, we don’t just lose our beloved Main Street businesses. We lose jobs, tax revenue and the economic backbone of our city.”

    The nonprofit organization Partnership for New York City predicts that the pandemic could end up permanently shuttering as many as a third of New York’s 230,000 businesses.

    Leslie Berkoff, a longtime bankruptcy attorney, told Bloomberg that some business owners don’t even file for bankruptcy, since it can cost as much as $25,000. Owners simply lock their businesses’ doors and leave them closed.

    “What’s the point of bankruptcy? Nobody’s going to chase you right now,” Berkoff told Bloomberg. “A lot of your vendors probably aren’t going to survive either.”

    In addition, Manhattan businesses that use the digital payment system Square are only making 62% of the income they earned before the pandemic.

    New York City may have to brace itself for additional closures. 

    On Tuesday, officials announced an increase in the daily rate of positive COVID-19 tests in the city. New York City Mayor Bill de Blasio indicated at a news conference that the city’s positive test rate had reached 3.25%, the highest mark since June. 

    “That is cause for real concern,” the mayor said, the New York Times reported. “The goal is to be under 3% in a way that is consistent.”

    Many of the city’s new cases in recent weeks have been linked to Borough Park, a predominantly Orthodox Jewish neighborhood where mask-wearing is nonroutine.


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