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

Hor Chou wants someone in charge of coronavirus business relief to walk South Seventh Street to assess the corridor’s storefront needs.

The strip of boutiques, jewelry, coffee shops, clothing stores, and salons that catered to Philadelphia’s Southeast Asian population was shocked, as were many local business districts, by the onset of the COVID-19 pandemic.

And even today, more than two years since the pandemic first hit, many of these businesses have yet to fully recover.

When the federal government released hundreds of billions of dollars in aid under the Check Protection Program, the details trickled in to businesses in the mostly Cambodian and Vietnamese area.

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

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

These challenges ranged from language barriers and digital literacy to banking relationships and even cultural attitudes. In some cases, something as simple as not having a private business email address is an opportunity to receive assistance.

Chou, president of the Cambodian American Business Community, estimates there are about 40 Southeast Asian-owned businesses along his corridor, which stretches from Jackson Street to Oregon Avenue.

In the census tract spanning Wolf Street to Oregon Avenue, the forgiven loans went to 14 different South Seventh Street businesses, a group that included many independent contractors and sole proprietors, according to data from Metro Philadelphia, The Inquirer, and Resolve Philly. gather

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

She immigrated to the United States with her husband, Aditya Setyawan, from Indonesia two decades ago, and together they run a restaurant business, Pecel Ndeso.

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

Hajati said she was too busy with her son’s online schooling at the height of the pandemic to consider business relief programs, even though Pecel Ndeso was struggling. He also focused on providing free food packages to members of the city’s food-insecure AAPI community, formerly through Kampoeng Indonesia and now with Gapura Philadelphia, the area’s first Indonesian community nonprofit that the couple co-founded.

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

But the restaurant business, established in 2004, is his full-time job, and PPP is open to sole proprietors and the self-employed, regardless of brick-and-mortar presence.

A joint data analysis among Resolve Philly, Metro, and The Inquirer attempted 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 directly to determine how many AAPI-owned businesses received loans.

This means that the data alone cannot indicate any difference in greater efforts to help businesses in the pandemic.

However, initial PPP relief flowed disproportionately to predominantly white communities, according to research by Robert Fairlie, an economics professor at the University of California, Santa Cruz, and Frank Fossen, a professor at the University of Nevada, Reno.

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

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

Analysis by Resolve Philly, Metro, and the Inquirer found that, locally, the number of loans, as well as the average loan amount, varied significantly for AAPI business owners depending on whether the business was located in a predominantly white census tract. or majority-Black.

In predominantly white census tracts, the median loan was more than $20,000 — and among the 10,472 loans that originated was more than $320 million. In areas where the largest demographic was Black, there were only 3,466 loans that were usually around $19,165 and totaled $66 million.

Dan Tang, owner of Tang Pharmacy in Olney, a diverse area where 46% of residents, a majority, are Black, said he believes the neighborhood generally receives less resources.

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“Like if you look at certain pockets of the city, they are flourishing,” he said.

Fern Rock Hardware, also in Olney, received about $5,000 in PPP funds, and owner Justin Lee, through a Korean interpreter, said he applied for only one of the program’s sixteen grants.

He explained that he would have struggled to get 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, mostly due to language barriers and technology challenges.

The city’s AAPI community is far from a monolith, with dozens of languages ​​and ethnicities.

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

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

The disconnect extends to information about the pandemic, including the COVID-19 vaccine, according to Nary Kith, who runs KITHS, a local Cambodian social service organization.

“People were so afraid that, if they contracted COVID, that was it,” he said. “That’s a death sentence.”

Even for most languages ​​spoken in the United States, PPP instructions were not available at first.

James Wang, president and CEO of Chinatown-based Bank of Asia, said an application was not available in simplified Chinese until at least the middle of the first round of loans.

“We have a lot of customers who really don’t speak the language,” he explained. “I think that, for one, it’s a big barrier. And to go online and access anything in English is very challenging.

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 Kith, Shenoy and others.

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

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A lack of digital literacy further hindered some businesses on South Seventh Street that did not have websites, let alone the sophisticated online ordering systems that became common during the pandemic. Additionally, many AAPI-owned businesses, especially mom-and-pop shops, had trouble preparing up-to-date financial statements and tax forms.

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

“They will not go out to seek help. Only a few of them do that, “he said. “That’s the culture. It’s a pride.”

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

Onofrio, who works closely with the corridor’s business managers, said some shop owners are suspicious of government aid, based on their experiences as refugees from Vietnam, Cambodia, Laos, and Indonesia.

Though none of the business owners who spoke to the Metro and Inquirer personally experienced AAPI bias or harassment, it’s hard to gauge how attitudes around the virus have impacted cash flow.

“A double whammy,” Shenoy added, referring to the pandemic’s toll on small businesses combined with anti-Asian sentiment.

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

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

“It should be a priority to ensure that these immigrants have access to information and financing as well, especially when the world is falling on fire, literally, and impacting their businesses,” he 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 by the Future of Work program. The story grew out of the work of Resolve Philly’s Community Engagement Team.


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