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Chinatown Businesses Frustrated Over Exclusion from NYC COVID-19 Loan Program

Businesses located within zip codes 10013 and 10038 aren’t eligible to apply due to income specifications

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Parts of Chinatown are not eligible to apply for a COVID-19-related loan program
Robert Sietsema/Eater

Several Chinatown businesses are calling out the city’s Department of Small Business Services (SBS) after a new loan program it released late last year excluded establishments from two Chinatown zip codes from applying for the loan. Gothamist first reported on the development, which excludes business in 10013 and 10038 from applying to the program, created for establishments in low-to-moderate income areas.

“The biggest frustration is that Chinatown businesses have been impacted as early as February because of xenophobia,” says Victoria Lee, co-founder of the neighborhood group Welcome to Chinatown, adding that the 10013 zip code has been historically neglected because it includes parts of Soho and Tribeca, both neighborhoods with higher median incomes.

SBS introduced the $35 million LMI Storefront Loan back in November 2020, offering up to $100,000, zero interest loans for businesses — including restaurants — with fewer than 100 employees located in low-to-moderate income areas in the city based on median income. But some zip codes, which include neighborhoods with higher median incomes, have been left out.

An SBS spokesperson told Gothamist that the zip codes chosen for eligibility for this loan program were created in line with federal guidelines, and that the city had given $7.45 million in grants and loans to neighborhoods with large Chinese immigrant and Chinese-American populations like Chinatown, Flushing, and Sunset Park.

Yet, Chinatown business owners and community groups say this is not enough. Relying on median income in a zip code alone doesn’t account for the income diversity within an area, says Lee, adding that it’s not just Chinatown alone that’s likely to be affected by loan programs that rely on this metric, but such criteria is likely to affect lower-income areas located next to more affluent neighborhoods. The 10002 zip code, which includes parts of Chinatown and the Lower East Side, is part of the program, yet the other two neglected zip codes — 10013 and 10038 — within the neighborhood are not eligible to apply for additional aid.

Chinatown restaurant owners say they feel left out yet again. “No matter how hard Chinatown works, we still get the short end of the stick,” says Liz Yee, co-owner of rice roll destination Tonii’s Fresh Rice Noodle and bakery Kam Hing, both located within the 10013 zip code.

Yee says they received a loan through the federal Paycheck Protection Program, but funds from that have now dried up, and she adds that other neighborhood business owners like her are being forced to burn through their personal savings to keep their businesses afloat. Other popular establishments within this zip code include Taiwan Bear House, Wo Hop, Hop Kee, and Jing Fong.

Still, Yee is optimistic and hopes that discussions between the city and local business groups will lead to a positive outcome. Lee confirmed that Welcome to Chinatown and several other local groups are in active discussions with SBS to get 10013, which encompasses a large part of Chinatown, to be added to the loan program, and Manhattan Borough President Gale Brewer tells Gothamist she’s asked the agency for an explanation and has requested 10013 be included in the LMI loan.

In April, a separate SBS loan program worth $20 million had run out within weeks due to the massive demand. An SBS spokesperson told Gothamist that the application for the LMI program is still open, but declined to say how much of the $35 million pool has been used up so far. SBS did not immediately return Eater’s request for comment.