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 along South Seventh Street to assess the need for the corridor’s storefronts.

Like many local business districts, the strip was bustling with grocery stores, jewelers, cafes, dress shops, and salons serving Philadelphia’s Southeast Asian population, in the early days of the COVID-19 pandemic.

And even today, more than two years since the pandemic first hit, many of those businesses have not fully recovered.

When the federal government released hundreds of billions of dollars in aid as part of the Paycheck Protection Program, the data slowly trickled down to mostly Cambodian and Vietnamese businesses in the area.

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

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

These challenges ranged from language barriers and digital literacy to banking relationships and even cultural attitudes. In some cases, businesses have missed the opportunity to get help because of something as simple as not having an email address.

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

In the census tract that covered Wolf Street to Oregon Avenue, eligible loans went out to 14 different businesses on South Seventh Street, a group that included many independent contractors and sole proprietors, according to data collected by Metro Philadelphia, The Inquirer, and Resolve Philly.

Irza Hajati, who lives in South Philadelphia, never even seriously considered 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 catering business, Pecel Ndeso.

Pecel Ndeso prepares food for weddings, arranges at festivals, and delivers orders for clients 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, while Pecel Ndeso was struggling. She has also focused on providing free food packages to members of the city’s food-insecure AAPI communities, previously through Kampoeng Indonesia and currently with Gapura Philadelphia, the area’s first Indonesian community nonprofit that the couple co-founded.

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

But the catering business, founded in 2004, is her full-time job, and PPP was open to sole proprietors and the self-employed, regardless of a brick-and-mortar presence.

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

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

This means that the data alone cannot show any differences in the maximum effort to help businesses in the pandemic.

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

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

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

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

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

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

“As you look at certain pockets in the city, they’re thriving,” he said.

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

He explained that he probably would have had trouble getting through the process at all 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, mainly due to language barriers and technology challenges.

The city’s AAPI communities are far from homogeneous, with many languages ​​and ethnicities.

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

Chou said data related to government programs is rarely available in Khmer, Cambodia’s most widely spoken language.

The disconnect extended to information about the pandemic, including COVID-19 vaccines, according to Nary Kith, who runs KITHS, a local social services organization in Cambodia.

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

Even for more widely spoken languages ​​in the United States, PPP guides were not initially available.

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

“We have a lot of clients who don’t really speak the language,” he explained. “I think that’s a huge hurdle, for one. And then it’s very challenging for them to go online and access anything 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 shared by Kith, Shenoy and others.

“With all these applications that require you to have an email and to check your email on a regular basis, that’s not what some people are familiar with,” said Lamei Zhang, a former project manager with Philadelphia Chinatown Development Corp.

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

Even when they could find those documents, some business owners were reluctant to hand them over to the federal government or unwilling to ask for help, Shenoy said.

“They won’t come out looking for help. Only a handful of them do,” he said. “That’s the culture. It’s a pride.”

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

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

While none of the business owners who spoke to the Metro and Inquirer had first-hand experience of AAPI bias or harassment, it’s hard to gauge how perceptions of the virus might affect cash flow.

“A double whammy,” Shenoy said, referring to the pandemic’s toll 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 — a belief that Asian Americans are more successful at work and in school than other people of color.

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

“The priority should be to make sure that those immigrants have access to information and funding as well, especially when the world is literally falling apart and businesses are being affected,” he said. she said.

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 the Resolve Philly Community Engagement Team.


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