Asian-American businesses under the gun

City talk | Jonnelle Marte 21 Apr 2021

After their Las Vegas eatery shut down for two months last year, Jan-Ie Low and her family reduced their business hours and converted much of their dining room into a food delivery hub.

Outdoor dining was not an option in the desert heat, and conventions, which bring in diners, were canceled because of Covid-19.

"If you don't adapt you're going to be left behind," says Low, whose family has owned Satay Thai Bistro & Bar for more than 15 years. Despite the changes, sales fell about 50 percent in 2020.

Covid-19 is hitting business owned by Asian-Americans on many fronts. Pandemic-related closures and restrictions on indoor gatherings were particularly hard on restaurants, stores, nail salons and other service industries, in which many Asian-owned firms are concentrated.

Language barriers and a dearth of banking relationships made it difficult for some business owners to access government aid even as they coped with an added layer of fear amid a surge in hate crimes, with Asians often blamed for Covid-19.

According to a report by the New York Federal Reserve and the American Association of Retired Persons that focused on older entrepreneurs who make up 80 percent of all small business owners, Asian-Americans fared worse than those Blacks and Hispanics despite going into the pandemic in a stronger economic position.

Some 9 percent of firms they owned were financially "distressed" in 2019 compared to 19 percent black-owned firms and 16 percent of Hispanic-owned businesses given that rating based on their profitability, credit score and business funding. Among white-owned firms, the figure was 6 percent.

But businesses owned by Asian-Americans took a hard hit early on in the crisis. By the end of March, their sales were down by more than 60 percent from a year ago against the 50 percent drop other small businesses face , according to JPMorgan Chase Institute.

And some 90 percent of small Asian-American firms in a New York Fed study lost revenue last year compared to 85 percent for blacks, 81 percent for Hispanics and 77 percent for whites.

Michael Park, owner of Bobby Schorr Cleaners in Philadelphia, said the dry cleaning business his family has owned for 34 years sometimes made only about US$100 (HK$780) a day in sales early on in the pandemic - less than a 10th of normal. Business picked up a bit over the summer as people became more comfortable venturing out, but sales remain about 25 percent of pre-pandemic levels.

Park used grants and small business loans to cover basic expenses. "We're just trying to stay afloat," he said.

Jamie Lee, who works for a community development group that supports housing, development and small businesses in Seattle's Chinatown said owners she works with know enough English to serve customers but are uncomfortable filling out complex financial forms - necessary to tap into grants and government aid.

Minority-owned businesses were largely excluded from the first round of Paycheck Protection Program loans last spring, according to research published in January by Robert Fairlie from the University of California at Santa Cruz and Frank Fossen of the University of Nevada.

More support for them came after the program was adjusted to include more participation by smaller and community-based lenders.

In Las Vegas, Low said applying for a PPP loan felt like hunting for toilet paper in the early months of the crisis. She eventually found a small lender willing to process her application.

In Washington, Teizi Mersai, business operations manager for Lam's Seafood Market, a Vietnamese-American-owned grocery store in an area known as Little Saigon in Seattle, said he and other mom and pop shop owners are thankful for the support received from neighborhood groups that helped them apply for aid and tap into other resources.

"The community really does come together," he says.

Mersai also joined a delivery service so customers could order groceries online. It took about six months to get set up fully because he and his staff had to research platforms and photograph thousands of the Asian items they offer, including drinks, noodles and snacks not captured in stock images provided by a third-party website.

The move online and a loosening of restrictions should help sales, Mersai adds.


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