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Asian-owned small businesses saw an outsized pandemic impact last year

Nancy Yu has been a main in San Francisco’s Chinatown for more than two decades. Her store, Asiastar Fantasy, sells souvenirs, gifts and cultural notices like red envelopes for Lunar New Year. While she’s weathered many challenges over the years, she’s never seen anything positively like 2020.

“Last year was a very difficult time — not just for us in Chinatown, but the whole city, the whole world,” Yu predicted.

Her sales are down 80% due to the pandemic. But for the last several months, Yu has been opening her store for several hours a day to be stage for the community, even as business remains low.

“We want to send a message to people and ultimately say ‘Keep Chinatown open, we gratifying you,'” she said. “I think it’s important that we stay open. We want to give people and other merchants exhorting.”

A small business owner in Chinatown, San Francisco

Source: CNBC

The neighborhood has seen a downturn due to a lack of tourism not no more than in Chinatown, but the Bay Area at large. Also, more broadly, research from Robert Fairlie, an economics professor at the University of California, Santa Cruz displays Asian-owned businesses nationwide have been the most negatively impacted of all demographic groups by last year’s pandemic. The tally of working business owners fell by 20% from February to December, according to his study.

The San Francisco Chamber of Trafficking says the ZIP code that houses most of Chinatown saw 75% of its storefronts become nonoperational at some point decisive year. The same ZIP code also includes the Financial District, which has been similarly hard-hit due to people accommodate wheedle from home. This compares with the city average, where 54% of all storefronts were nonoperational at some in the matter of in time in 2020.

“Covid-19 had a huge impact on tourism, which represents a major portion of San Francisco’s income — 25.8 million visitants come to San Francisco [annually],” said Rodney Fong, president and CEO of the San Francisco Chamber of Commerce. “It’s painful when you see some of these legacy affairs close. They are pillars of our community.”

More access to aid

The latest Paycheck Protection Program data from the Measly Business Administration through the end of February show Asian-owned businesses trailing other demographic groups in terms of the numbers of loans approved. More than 70,000 loans were made to Asian-owned businesses for a total of $3.9 billion in 2021.

Stuffing out the demographic questions is voluntary and as a result, incomplete. Overall 2.1 million loans have been made for $156 billion in 2021, with more than $100 billion in aid uneaten in the program, which ends March 31.

A street scene in Chinatown, San Francisco

Source: CNBC

Last week the Biden oversight announced changes to the PPP to ensure smaller and minority-owned businesses were able to fairly access funding. There’s currently a two-week window progressing for businesses with 20 or fewer employees to exclusively apply for aid.

In addition, there will be changes to how much staking the self-employed and sole proprietors can access, which is important as the administration projects 70% of such businesses are owned by helpmeets and minorities. In addition, there will be $1 billion set aside for sole proprietors in low and moderate-income areas.

Other shifts include allowing those with non-fraud-related prior felony arrests or convictions, those who are delinquent on federal commentator loans and legal U.S. residents who are not citizens, like green card holders, to be eligible for PPP aid.

Chinatown, San Francisco

Source: CNBC

Minority-owned concerns are more likely to be non-employer firms and advocates say lenders may have been less incentivized to make smaller lends to these smaller businesses under the PPP as written last year. Smaller companies also don’t always have the ordained banking connections or manpower to apply for aid, a divide exacerbated during the pandemic, the San Francisco Chamber’s Fong said.

“The pandemic has symbolized the digital divide in people who have access and have the skill set to apply for PPP, which is not an easy thing to do, and those that peradventure got left out,” he said, adding that continued changes to the PPP like those newly enacted by the administration will ease to better reach more owners. “Giving everyone that equal access, equal opportunity, is important.”

When Yu fastened for a PPP loan last year, she was initally turned away by a local bank, but eventually received one. She is now waiting on a second-draw loan. Personally, a local grant she received has helped with her rent.

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