How PPP Loans Missed the Target at Philly’s Southeast Asian Business Owners

Hor Chou wants someone in charge of relieving the coronavirus business to walk down South Seventh Street to assess the need for the corridor’s storefronts.

The bustling street of grocery stores, jewelry stores, cafes, clothing stores and salons catering to Philadelphia’s Southeast Asian population, like many local business districts, was rocked in the early days of the COVID-19 pandemic.

And even today, more than two years after the pandemic first broke out, many of those companies have not fully recovered.

As the federal government provided hundreds of billions of dollars in aid under the Paycheck Protection Program, details slowly trickled down into the region’s mostly Cambodian and Vietnamese businesses.

“Information needed for survival or information needed for economic stability comes too late to our community,” Chou, owner of New Happy Garden takeaway restaurant, 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 preventing Asian American/Pacific Islander (AAPI) monolith entrepreneurs in Philadelphia from developing PPP obtain loans, or slowed down their process of obtaining financial assistance.

These challenges ranged from language barriers and digital literacy to banking relationships and cultural attitudes. In some cases, something as simple as not having an email address left businesses without a chance to get support.

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

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

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

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

Pecel Ndeso prepares food for weddings, sets up at 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 educating her son online at the height of the pandemic to consider business aid programs, though Pecel Ndeso has struggled. She has also focused on providing free food packages to food-insecure members of the city’s AAPI communities, formerly through Kampoeng Indonesia and currently with Gapura Philadelphia, the region’s first non-profit Indonesian community that the couple co-founded.

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

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

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

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

That means the data alone can’t show differences in the largest efforts to support businesses during the pandemic.

However, initial PPP relief flowed disproportionately into white-majority 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 companies with longstanding 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 for a two-week period exclusively to businesses with fewer than 20 employees.

“Did that 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 Inquirer found that the number of loans and the average local loan amount for AAPI business owners varied significantly depending on whether the business was located in a predominantly white census or predominantly black.

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

Dan Tang, owner of Tang Dispensary in Olney, a diverse area where 46% of residents, a majority, are black, said he believes the neighborhood is receiving fewer resources in general.

“If you look at certain bags around town, they’re blooming,” he said.

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

He explained that 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, he likely would have had trouble getting through the process at all.

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 chairman of the Asia-American Chamber of Commerce in the greater Philadelphia area. “You only have to translate Spanish. We still have much more to do.”

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

According to Nary Kith, head of KITHS, a local Cambodian social service organization, the disruption extended to information about the pandemic, including COVID-19 vaccines.

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

Even for the more widely spoken languages ​​in the United States, PPP instructions were initially unavailable.

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

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

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

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

A lack of digital literacy has further stymied some businesses along South Seventh Street that didn’t have websites, not to mention the sophisticated online ordering systems that have become commonplace during the pandemic. Additionally, many AAPI-owned businesses, particularly corner shops, have had trouble preparing financial statements and up-to-date tax forms.

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

“They will not come out and look for help. Very few do that,” he says. “That’s the culture. It’s a pride.”

“The closer you get to the bottom and the smallest types of businesses, the greater the confidence for most people, I think,” said James Onofrio, program manager at the Philadelphia Department of Commerce.

Onofrio, who works closely with corridor store managers, said some shopkeepers are wary of state aid based on their experiences as refugees from Vietnam, Cambodia, Laos and Indonesia.

Although none of the business owners who spoke to Metro and Inquirer have personally experienced AAPI bias or harassment firsthand, it’s difficult to measure how attitudes towards the virus might have impacted cash flow.

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

Community leaders said there needs to be greater awareness of the obstacles faced by AAPI business owners, perhaps particularly given the myth of the “exemplary minority” — a belief that Asian Americans are more successful at work and in school than others colored.

“I think the pandemic was a wake-up call for the city as it saw where there isn’t enough access, particularly 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 also have access to information and finance, especially when the world is literally falling apart and businesses are impacted,” she added.

Julie Christie and Diana Lu contributed to this report.


This story was a collaboration between The Inquirer, Metro Philadelphia and Resolve Philly and was made possible through the Future of Work program. The story was created through the work of Resolve Philly’s Community Engagement Team.


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