Bankruptcy filings are up 40% in the city.
The last seven months have been notably hard on New York City, with long-term quarantines and closures syphoning money from business owners’ pockets and forcing them to close up shop. According to a new report from Bloomberg, approximately 6,000 NYC businesses have been forced to close for good, with bankruptcy filings surging by at least 40%. Worse yet, if their data is to be believed, even more closures will come alongside the colder months.
Over the weekend, at least 1,000 new cases of COVID-19 were confirmed within the city, with a large portion coming from the Jewish communities of Brooklyn and Queens observing Yom Kippur. What was already a tense atmosphere on the city streets has grown worse, with many citizens less than willing to shop, dine, or travel within close quarters. Outdoor ventures like larger shopping districts and restaurants with outdoor seating have managed to skirt the line with the aid of open space, but once the snow starts falling, that advantage will be lost.
“When the cold weather comes, that’s when we’ll start to see a surge in bankruptcies in New York City,” lawyer Al Togut told Bloomberg.
As federal aid runs out, loans come due, and landlords come knocking, numerous business owners small and large will not be able to keep their storefronts open. This, in turn, will have a negative effect on the city as a whole, as a loss of operating businesses means a loss of overall economic stability.
The situation is so dire for some small business owners, they cannot even afford to file for bankruptcy, which can cost up to $25,000. For these unfortunate business owners, the only option is to shutter the windows, lock the door, and walk away.
“What’s the point of bankruptcy? Nobody’s going to chase you right now,” said bankruptcy attorney Leslie Berkoff. “A lot of your vendors probably aren’t going to survive either.”
By the estimates of Partnership for New York City, by the time the pandemic is finally under control, NYC could lose as many as a third of its 230,000 registered businesses.