How PPP loans missed the mark with Philly’s Southeast Asian business owners

Hor Chow wants someone in charge of coronavirus relief to walk South Seventh Street to assess the need for storefronts along the corridor.

The bustling array of grocery stores, jewelers, coffee shops, clothing stores and salons that cater to Philadelphia’s Southeast Asian population was, like many local business districts, rocked in the early days of the COVID-19 pandemic.

Even today, more than two years after the pandemic first hit, many of those businesses have not fully recovered.

When the federal government released hundreds of billions of dollars in aid under the Wage Protection Program, details slowly trickled out to businesses mostly in Cambodia and Vietnam.

“The information that is needed for survival, or the information that is needed for economic stability, comes to our community too late,” Chou, owner of the New Happy Garden takeaway, said via Khmer [Cambodian language] interpreter.

Interviews conducted over a year with Asian small business owners, community groups, corridor managers, and local government officials revealed barriers that prevented Asian American/Pacific Islander (AAPI) monolithic entrepreneurs in Philadelphia from obtaining PPP loans or slowed their the process of obtaining financial aid.

Those challenges ranged from language barriers and digital literacy to banking relationships and even cultural attitudes. In some cases, something as simple as not having an email address prevented businesses from getting help.

Chow, president of the Cambodian American Business Community, estimates that his corridor, which stretches from Jackson Street to Oregon Avenue, has about 40 Southeast Asian-owned businesses.

In the census tract that covers Wolf Street to Oregon Avenue, 14 different businesses on South Seventh Street received forgivable loans, a group that included numerous independent contractors and sole proprietors, according to data compiled by Metro Philadelphia, The Inquirer and Resolve Philly. .

Irza Hayati, who lives in South Philadelphia, didn’t even seriously consider applying for a PPP loan.

Two decades ago, she immigrated to the United States with her husband, Aditya Setiawan, from Indonesia, and together they run a catering business, Pecel Ndeso.

Pecel Ndeso prepares food for weddings, caters at festivals and delivers orders to clients in New York and Washington. Last summer, they joined the popular Southeast Asian market at FDR Park.

Hayati said she was too busy with her son’s online education at the height of the pandemic to think about business assistance programs, even as Pecel Ndeso struggled. She has also focused on providing free food packages to food-insecure members of urban AAPI communities, previously through Kampoeng Indonesia, and currently with Gapura Philadelphia, the first non-profit in the Indonesian community that the couple co-founded.

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“The other reason is because we don’t have a real business, like a restaurant,” she said.

But the catering business, which was founded in 2004, is her full-time job, and the PPP was open to independent entrepreneurs and self-employed persons, regardless of physical presence.

A joint data analysis between Resolve Philly, Metro and The Inquirer sought to understand the distribution of PPP loans among AAPI businesses in Philadelphia.

But lenders were not required to collect or report racial or ethnic information about business owners to the federal government, meaning barely a quarter of the data could be used to directly determine how many AAPI-owned businesses received loans.

This means that the data alone cannot indicate any disparities in the greatest effort to help businesses in the pandemic.

However, according to research by Robert Fairley, an economics professor at the University of California, Santa Cruz, and Frank Fossen, a professor at the University of Nevada, Reno, the PPP’s initial relief disproportionately reached the majority white community.

Much of the money from the first round of the program, in April 2020, went to companies with long-standing banking relationships or was sent through financial institutions in rural areas, they wrote. Distributions to minority communities were better in the second round and improved significantly in the third round in 2021, when the Biden administration reopened PPPs exclusively to businesses with fewer than 20 employees for a two-week period.

“Did that delay make a big difference?” We don’t know,” Fairley said in an interview. “We just don’t know the answers to those questions.”

A Resolve Philly, Metro, and Inquirer analysis found that, locally, the number of loans, as well as the average loan amount, changed significantly for AAPI business owners based on whether the business was located in a census tract that was majority-white or majority- black.

In the mostly white census tract, the median loan was more than $20,000 — and among the 10,472 loans that totaled more than $320 million. In areas where the largest demographic group was black, there were only 3,466 loans that typically totaled about $19,165 and totaled $66 million.

Dan Tang, owner of Tang’s Pharmacy in Olney, a diverse area where 46% of the residents are mostly black, said he believes the neighborhood is getting fewer resources overall.

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“It’s like if you look at certain pockets of the city, they’re booming,” he said.

Fern Rock Hardware, also in Olney, received about $5,000 in PPP money, and owner Justin Lee said through a Korean translator that he had applied for only one of two rounds of funding for the program.

He explained that he probably would have had a hard time getting through the process without the help of the North Fifth Street Revitalization Project, a neighborhood business group, and Noah Bank, an Elkins Park financial institution that serves the Korean community.

Other AAPI small business owners have not been as successful as Lee, primarily due to language barriers and technology challenges.

The city’s AAPI communities are far from monoliths, with dozens of languages ​​and ethnic groups.

“It’s not like Hispanics,” said Narasimha B. Shenoy, founder and president of the Asian American Chamber of Commerce of Greater Philadelphia. “They just have to interpret Spanish.” We have to do a lot more than that.”

Chou said details regarding government programs are rarely available in Khmer, Cambodia’s most widely spoken language.

The blackout extended to information about the pandemic, including vaccines against COVID-19, according to Nari Kithu, who heads KITHS, a local Cambodian social services organization.

“People were so afraid that if they got COVID, that was it,” she said. “It’s a death sentence.”

Even for languages ​​that spread in the United States, PPP instructions were not initially available.

James Wang, president and CEO of Chinatown-based Bank of Asia, said the application was not available in Simplified Chinese until midway through the first round of loans.

“We have a lot of clients who really don’t speak the language,” he explained. “I think that, for example, is a big obstacle. And then it’s very challenging for them to go online and access everything that’s in English.”

Elisa Kim, whose family owns T-House Inc., a screen printing shop in Olney, said many neighboring business owners don’t have an email address, a concern echoed by Keith, Shenoy and others.

“With all these apps that require you to have email and check your email regularly, it’s not something that some people are familiar with,” said Lamei Zhang, a former project manager for the Philadelphia Chinatown Development Corp.

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A lack of digital literacy further inhibited some businesses along South Seventh Street that did not have websites, let alone the sophisticated online ordering systems that have become commonplace during the pandemic. In addition, many AAPI-owned businesses, especially mom-and-pop stores, had trouble preparing financial statements and up-to-date tax forms.

Even when they were able to locate those documents, some business owners were hesitant to turn them over to the federal government or were reluctant to ask for help, Shenoy said.

“They won’t go out and ask for help.” “Only a few of them do,” he said. “It’s culture. That’s pride.”

“As you get down to the ground level and you get down to the smallest types of businesses, the biggest hurdle for most people, I think, is trust,” said James Onofrio, program manager at the Philadelphia Department of Commerce.

Onofrio, who works closely with business managers in the corridors, said some store owners are leery of government assistance, based on their experiences as refugees from Vietnam, Cambodia, Laos and Indonesia.

While none of the business owners who spoke to Metro and the Inquirer personally experienced bias or harassment against AAPIs firsthand, it’s hard to gauge how attitudes surrounding the virus may have affected cash flow.

“A double whammy,” Shenoy added, referring to the effects of the pandemic on all small businesses combined with anti-Asian sentiment.

Community leaders said there needs to be more awareness of the barriers AAPI business owners face, perhaps especially in light of the “model minority” myth — the belief that Asian Americans are more successful at work and in school than other people of color.

“I think the pandemic has been a wake-up call for the city to just look at where there’s not enough access, especially for immigrant communities,” said Stephanie Michel, executive director of Olney’s North Fifth Street Revitalization Project.

“It should be a priority to make sure that those immigrants also have access to information and funding, especially when the world is falling apart, literally, and it’s affecting business,” she added.

Julie Christie and Diana Lu contributed to this report.


This story was a collaboration of The Inquirer, Metro Philadelphia and Resolve Philly and was made possible through the Future of Work program. The story grew out of the work of Resolve Philly’s community engagement team.


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