Asian American businesses have suffered “Twin Crises” during the pandemic

Lay down the stats… The pandemic has brought suffering for everyone, hitting small business owners especially hard. On a national scale, 34% of America’s small businesses have closed since January 2020. And Asian American-owned businesses have suffered an outsized impact: according to a recent report from the NY Fed, small firms owned by Asian Americans suffered more than those owned by Black, white, and Hispanic Americans.

• ~90% of small Asian-American firms lost sales last year, a rate higher than for other groups.
• ~60%: By the end of March, sales for Asian American businesses were down by 60% from 2019 — compared to a ~50% drop suffered by others.

Explain it… Only ~9% percent of firms owned by Asian Americans were financially “distressed” in 2019 — compared to 19% of Black-owned firms and 16% of Hispanic owned businesses. Despite starting the pandemic in a stronger financial position, Asian-American businesses suffered a heavier financial toll. A few reasons why...

• Business type: Pandemic-related closures and restrictions were particularly hard on the restaurants, stores, nail salons, spas, and other service industries in which many Asian-owned businesses are concentrated.
• Trouble accessing aid: Language barriers and a lack of banking relationships made it hard for some business owners to access government aid like PPP loans.
• Racism, violence, and prejudiced rhetoric blaming Asians for the coronavirus may also have contributed to business declines. Over the past year, there has been a disturbing uptick in violence and hate crimes against Asian-Americans.
• Geography: Asian populations are concentrated in states like NY, NJ, and CA, and in big urban areas — all of which have taken crushing financial hits.