The 34-year-old entrepreneur has since returned to her studio, escorted by federal marshals. Everything was covered in a thick layer of dust. She grabbed some files and a few computers, and installed them in a temporary office in Greenwich Village, where she struggles to get Isocurve back on track. Revenues hit $1 million last year, but the focus now is less on sales than on survival. With no income coming in, she has tapped a personal savings account, and is fighting her insurance company, which she says won't pay up. Meanwhile, she's digging through what's left of her records, searching, often in vain, for the documents she needs to apply for a disaster relief loan. "Rebuilding my life," Allgood says, "is a full-time job." DIGGING OUT. The economic toll exacted on New York City by last month's attacks is by now well known: 13 million square feet of office space destroyed; $34 billion in property damage; $1 billion in lost city revenues. Buried in those statistics are the stories of thousands of entrepreneurs like Rachel Allgood. Despite its reputation as a corporate hub, Lower Manhattan is very much a small-business center, with perhaps the densest concentration in the nation. At least 25,000 small businesses make their home on the southern tip of the island below Houston Street--more than the total in cities like Toledo, Ohio, or Baton Rouge, La., according to Dun & Bradstreet Corp. Citywide, small companies account for about 85% of all jobs, says Marc M. Goloven, an economist at J.P. Morgan Chase & Co. Financial services, by contrast, employs just 5%. "These small businesses are the city's fabric," Goloven says.
How badly is that fabric frayed? Ask Joan Zimmerman, executive vice-president at G.Z. Stephens Inc., a five-person executive search firm that was based on the 47th floor of the World Trade Center. When the first jetliner hit, Zimmerman says, "the ceiling started coming down. Our only thought was to get out." Computers, files, briefcases, and Palm Pilots were left behind. Zimmerman even neglected to slip her pumps back on. She exited the building and found herself in stocking feet, tiptoeing across shards of plaster and shattered glass.
It's as though she has been walking on broken glass ever since. The firm is homeless, camped in a conference room on loan from a friend. For two weeks, they had neither phones nor e-mail, making it all but impossible to reach clients. What's worse, those clients are in the finance industry, and have postponed or canceled hiring plans. "Our revenues are going to be devastated," she says.
Banks and the U.S. Small Business Administration have stepped up with low-interest loans. But as of Oct. 19, only 2,159 businesses had applied for loans, and only about 447 loans, for a total of $47.9 million, had been approved. The slack demand makes sense to Zimmerman: "This seems like a bad time to be taking on debt." Indeed, many fear that a wide swath of small businesses will simply fold beneath the pressure. "They can't pay bills; they can't pay rent," says Madelyn Wils, chairwoman of Community Board 1 in Lower Manhattan. "I don't know how many will make it."PULLING UP STAKES. That poses a serious challenge for the city, which lured thousands of small businesses downtown in the mid-1990s. City officials have created a bridge-loan program for entrepreneurs awaiting their SBA funding, and are set to launch a grant program. But with much of the financial district still in ruins, "there's a limited amount of resources we can bring to bear," says Michael Carey, president of the New York City Economic Development Corp. "Downtown will rebuild. But people need to be patient."
The signs aren't good: Even relatively healthy companies are wavering. Pisarkiewicz Masur & Co., a 10-person marketing company based four blocks east of the Trade Center site, has emerged more or less unscathed. Several key deals have been postponed, and the company dismissed two employees. But new clients are coming in, and sales are expected to reach about $2 million in 2001. When its lease expires in February, though, the company is considering moving to New Jersey, where most of the executives live. "It's just so sad here, like a big graveyard," says Mary F. Pisarkiewicz, the company's president. In such an atmosphere, digging out will likely continue long after the cleanup crews have gone home. By Larry Kanter