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How PPP Loans Missed the Mark with Philadelphia’s Southeast Asian Business Owners

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

Philadelphia’s bustling strip of grocery stores, jewelers, cafes, clothing boutiques and salons catering to Southeast Asians was, like many local business districts, shaken at the start of the COVID-19 pandemic.

And even today, more than two years into the pandemic, many of these businesses have not fully recovered.

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

“The information needed for survival, or the information needed for economic stability, comes too late in our community,” Chou, owner of takeout restaurant New Happy Garden, said through a Khmer. [Cambodian language] 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 were preventing monolithic Asian American/Pacific Islander entrepreneurs (AAPI) in Philadelphia to obtain PPP loans or slowed down their process of obtaining 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 an email address has deprived businesses of the ability to receive help.

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

In the census tract spanning Wolf Street to Oregon Avenue, repayable loans were issued to 14 different South Seventh Street businesses, 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, hasn’t 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 restaurant business, Pecel Ndeso.

Pecel Ndeso prepares food for weddings, organizes 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 packages, even though Pecel Ndeso was struggling. She has also focused on providing free food parcels to food-insecure members of AAPI communities across the city, previously through Kampoeng Indonesia and currently with Gapura Philadelphia, the first Indonesian non-profit community the couple has co-founded.

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

But the catering business, which was established in 2004, is his full-time job, and the PPP was open to sole proprietors and self-employed people regardless of physical presence.

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

But lenders weren’t 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 businesses owned at AAPI had received loans.

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

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

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

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

The Resolve Philly, Metro, and Inquirer analysis found that locally the number of loans, as well as the average loan size, changed significantly for AAPI business owners depending on whether the business was located in a predominantly census tract. White. or predominantly black.

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

Dan Tang, owner of Tang Pharmacy in Olney, a diverse neighborhood where 46% of residents, a plurality, are black, said he thinks the neighborhood generally receives fewer resources.

“As if you look at certain pockets of the city, they’re blooming,” he said.

Fern Rock Hardware, also in Olney, received around $5,000 in PPP, and owner Justin Lee, through a Korean interpreter, said he only requested one of the two sets of program funding.

He explained that he probably would have struggled to go through the process without the help of the North Fifth Street Revitalization Project, a group of neighborhood businesses, and Noah Bank, an Elkins Park financial institution serving of the Korean community.

Other AAPI small business owners haven’t been as successful as Lee, mostly due to language barriers and technology challenges.

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

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

Chou said details about government programs are rarely available in Khmer, the most widely spoken language in Cambodia.

The disconnect has extended to information about the pandemic, including COVID-19 vaccines, according to Nary Kith, who heads KITHS, a local Cambodian social service organization.

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

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

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

“We have a lot of customers who really don’t speak the language,” he explained. “I think, to begin with, it’s a huge hurdle. And then for them to go online and access anything in English is very difficult.

Elisa Kim, whose family owns T-House Inc., a screen printing shop in Olney, said many neighboring business owners lacked email addresses, a concern echoed by Kith, Shenoy and d ‘others.

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

A lack of digital literacy further inhibited some businesses along South Seventh Street that lacked websites, not to mention the sophisticated online ordering systems that have become commonplace during the pandemic. Additionally, many AAPI-owned businesses, especially mom-and-pop shops, struggled to prepare up-to-date financial statements and 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 they were unwilling to ask for help, Shenoy said.

“They won’t come out for help. Only a few do,” he said. “It’s culture. It is a pride. »

“As you get closer to ground level and closer to the smaller 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 leaders in the corridor, said some shop owners are wary of government assistance, 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 personally experienced bias or harassment from AAPI, it is difficult to gauge the impact that attitudes around the virus may have had. on cash flow.

“A double whammy,” Shenoy added, 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 facing AAPI business owners, perhaps particularly in light of the myth of the “model minority” – a belief that Native Americans do better at work and school than other people of color.

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

“It should be a priority to ensure that these immigrants also have access to information and funding, especially when the world is literally collapsing and impacting businesses,” she added. .

Julie Christie and Diana Lu contributed to this report.

Acknowledgement

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