Asian-owned small companies had an outsized pandemic final 12 months
Nancy Yu has been a staple in San Francisco’s Chinatown for more than two decades. Her shop, Asiastar Fantasy, sells souvenirs, gifts, and cultural items like red envelopes for the Lunar New Year. While she has overcome many challenges over the years, she has never seen anything like 2020.
“Last year was a very difficult time – not just for us in Chinatown, but for the whole city, the whole world,” said Yu.
Their sales have fallen by 80% due to the pandemic. But in the past few months, Yu has been opening her shop several hours a day to be present for the community, even if business remains low.
“We want to send a message to people and finally say, ‘Keep Chinatown open, we welcome you,'” she said. “I think it’s important that we stay open. We want to encourage people and other traders.”
A small business owner in Chinatown, San Francisco
The neighborhood has seen a decline due to the lack of tourism not just in Chinatown but in the Bay Area as a whole. In a broader sense, research by Robert Fairlie, an economics professor at the University of California at Santa Cruz, shows that Asian-owned companies across the country were hit hardest of all populations by the pandemic last year. According to his study, the number of working entrepreneurs fell by 20% from February to December.
The San Francisco Chamber of Commerce states that in the zip code where most of Chinatown is located, 75% of store fronts were down at some point in the past year. The same zip code also includes the financial district, which is similarly affected due to people working from home. This is comparable to the city average, where 54% of all store fronts were not operational at some point in 2020.
“Covid-19 has had a huge impact on tourism, which is a large part of San Francisco’s income – 25.8 million visitors come to San Francisco [annually]”said Rodney Fong, President and CEO of the San Francisco Chamber of Commerce.” It is painful to see some of these old businesses close. They are pillars of our community. “
More access to help
The latest data from the Small Business Administration’s Paycheck Protection Program through late February shows that Asian-owned companies are lagging behind other demographics in terms of the number of loans approved. In 2021, more than 70,000 loans were granted to Asian-owned companies for a total of $ 3.9 billion.
Filling out the demographic questions is voluntary and therefore incomplete. A total of $ 2.1 million in loans totaling $ 156 billion were granted in 2021, with more than $ 100 billion in aid remaining in the program, which ends March 31.
A street scene in Chinatown, San Francisco
Last week, the Biden government announced changes to the PPP to ensure smaller and minority-owned companies have fair access to finance. There is currently a two-week window for companies with 20 or fewer employees to apply for help only.
In addition, the amount of money self-employed and sole proprietorships will have access to will change. This is important as the administrative projects of 70% of these companies are owned by women and minorities. In addition, $ 1 billion will be allocated to sole proprietorship in low and middle income areas.
Other changes include enabling PPP grants for those with non-fraudulent previous arrests or convictions for criminal offenses, for those who have defaulted on federal student loans, and for legitimate US citizens who are not citizens, such as US citizens. B. Holders of a Green Card.
Chinatown, San Francisco
Minority-owned companies are more likely to be non-employer companies, and proponents say lenders may have had less incentive to lend smaller loans to these smaller companies under the PPP, as written last year. Smaller businesses also don’t always have the established bank accounts or workforce to seek help, a rift that has worsened during the pandemic, said Fong of the San Francisco Chamber.
“The pandemic has shown the digital divide between people who have access and the skills necessary to apply for PPP, which is not easy, and those who may have been left out,” he said, adding that the changes are ongoing Continued at PPP PPPs like those newly enacted by the administration will help better reach more owners. “It is important to give everyone equal access and opportunities.”
When Yu applied for a PPP loan last year, she was initially turned down by a local bank, but was eventually given one. She is now waiting for a second drawing loan. Regardless, a local scholarship she received helped with her rent.
Anti-Asian incidents are increasing
Aside from the business impact of the pandemic, the Asian-American community as a whole faces another painful threat – an increase in violence and racism against the Asian population over the past year.
Between March 19 and December 31, Stop AAPI Hate, an organization tracking anti-Asian incidents, found more than 2,800 reports of racism and discrimination against Asian Americans in the US, including more than 100 against the elderly.
Yu said the threat was on her.
“We want people to know that we are here for peace, we are here for prosperity and for the American dream. We have the same dream. That is why we came to America,” she said.
Despite the challenges for 2020, Yu is making progress. She plans to open a second location in Chinatown next year and sell Boba tea.
– CNBC’s Betsy Spring contributed to this report.