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

Hor Chou wants someone responsible for the coronavirus business relief to walk along South Seventh Street to gauge the need of the corridor’s storefronts.

The bustling strip of grocery stores, jewelry, cafes, 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.

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

As the federal government released hundreds of billions of dollars in aid as part of the Paycheck Protection Program, details slowly trickled in to the area’s mostly Cambodian and Vietnamese businesses.

“Information that is necessary for survival, or information that is needed for economic stability, comes too late to our community,” said Chou, owner of the New Happy Garden takeout restaurant, through a Khmer [Cambodian language] Interpreter.

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

These challenges range 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 have deprived companies of the opportunity to receive help.

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

In the census tract covering Wolf Street to Oregon Avenue, forgivable loans went out to 14 different South Seventh Street businesses, a group that includes 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, 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 catering business, Pecel Ndeso.

Pecel Ndeso prepares food for weddings, caters for parties and delivers orders to customers in New York and Washington. Last summer they joined the popular Southeast Asian Market in FDR Park.

Hajati said she was too busy with her son’s online school at the height of the pandemic to consider business relief programs, even as Pecel Ndeso struggles. She has also been focused on providing free food parcels to food-insecure members of the city’s AAPI communities, formerly through Kampoeng Indonesia and currently with Gapura Philadelphia, the region’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,” she said.

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

A joint data analysis between Resolve Philly, the 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 differences in the greatest effort to help businesses in the pandemic.

However, initial PPP relief flows disproportionately to majority-white communities, according to research conducted 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 sent through 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 PPP 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 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 amount, varied significantly for AAPI business owners based on whether the business was located in a census tract that was majority-white. or majority-black.

In mostly white census tracts, the median loan was more than $20,000 — and among 10,472 loans that totaled more than $320 million. In tracts where the largest demographic was Black, there were only 3,466 loans that were typically 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 the residents, a plurality, are black, said he believes the neighborhood is getting fewer resources overall.

“Like when you look at different pockets in the city, they’re thriving,” he said.

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

He explained that he likely would have had trouble getting through the process without the help of the North Fifth Street Revitalization Project, a neighborhood business group, and Noah Bank, a financial institution in Elkins Park 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 a monolith, with dozens of languages ​​and ethnicities.

“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 related to government programs are rarely available in Khmer, Cambodia’s most widely spoken language.

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

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

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

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

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

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

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

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A lack of digital literacy continued to hamper 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 businesses, have difficulty preparing financial statements and current 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 unwilling to ask for help, Shenoy said.

“They don’t come out and look for help. Only a few of them do,” he said. “That’s the culture. It’s a pride.”

“As you get closer to the ground level and you get closer to the smallest 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 corridor store managers, said some store owners are suspicious of government assistance, based on their experiences as refugees from Vietnam, Cambodia, Laos and Indonesia.

Although none of the business owners who spoke to Metro and the Inquirer have personally experienced AAPI bias or harassment, it’s hard to gauge how attitudes surrounding the virus are affecting 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 AAPI business owners face, perhaps especially in light of the “model minority” myth – a belief that Asian Americans are more successful in work and school than other people of color.

“I think the pandemic was a wake-up call for the city to just see 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 these immigrants have access to information and financing, especially when the world is falling apart, literally, and businesses are affected,” 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 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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