At King Palace restaurant, an institution on Stockton Boulevard known for its dim sum, owner Paula Yang is worried.

These days, the staff is a skeleton crew of cooks that serve a small trickle of take-out orders, and Yang is now helping in the kitchen herself. She said she first started to notice the impact of the coronavirus last month.

“It was back in early March, I could see it every day — sales dropping, customers dropping,” Yang said. “By the time I got to the second week of March, the restaurant was dead.”

She’s lost about 80 percent of her business and has been struggling to keep things going with just to-go orders.

“Not even a third of my dining area is full, we need all the help we can get,” she said.

But unfortunately for Yang, she may have missed out on one of the ways the city of Sacramento was offering to assist small businesses.

Back in mid-March, as pandemic-related closures just started to take hold, the City Council allocated a million dollars for zero interest loans.

The amounts weren’t huge, ranging from $5,000 to $25,000, but the city hoped small businesses could use the money to do essential things like paying employees or utility bills.

The city says its emphasis was on trying to address need quickly and to get the money out as fast as possible. But in the process, many businesses in less affluent and more underserved neighborhoods-of-color were overlooked.

A majority of the money went to businesses in Midtown and downtown, and those in Del Paso Heights, Oak Park and South Sacramento received relatively little.

Yang’s restaurant is one of many along the corridor known as Little Saigon, which extends block after block on Stockton Boulevard in South Sacramento. This hub of Vietnamese, Chinese and other Asian restaurants and stores did not receive any loans from the city’s program, according to the local business district.

“Of course I would have applied. For the first month, it’d be helpful to pay my rent,” Yang said of the loans.

Applications for the loans opened on March 18 and closed two days later. The city was flooded: A million dollars was only enough to cover 101 businesses, but the city received about 1,400 applicants asking for help. Another 2,500 were still in process.

“We saw huge issues out there with our small businesses, particularly with our restaurants and retail, which were the first ones seeing the brunt of the COVID wave,” Assistant City Manager Michael Jasso said.

He says the city’s goal with the loans was to do something “very quickly” to support local businesses. Recipients of the proposed loans were announced on April 2.

“We were never going to help all our businesses or at the depth that they needed, but it was important for the city to be a first-mover,” Jasso said.

The loans were awarded on a “first-come first-serve” basis, Jasso explained, and that a slight preference was given to day cares, who had applied in lower numbers than other businesses. 6% of the city’s total loan dollars went to 11 day care facilities.

He acknowledged, though, that the grants do not perfectly reflect the variety of businesses in need.

“We don’t have the geographic diversity that we’d want throughout the city, that was partly because of the expediency, partly because of the definition of focusing on restaurants and retail,” Jasso said.

A CapRadio analysis of the businesses awarded loans indicates that more than half of the money went to those in Midtown and Downtown neighborhoods, where there is a concentration of restaurants, bars, nightclubs and other businesses.

In contrast, historically underserved neighborhoods-of-color, such as central and south Oak Park and Meadowview, got less than 1% of the loans each.

Del Paso Heights in North Sacramento, where the city says it canvassed, was awarded about 2%.

Yang at King Palace said she hadn’t been alerted about the city’s loan program. Neither had Fiona Duong, the owner of Happy Garden, another nearby dim sum restaurant.

“If one of us had heard about it, the whole street would have heard about it,” Duong said.

Yang also learned about it after the deadline.

“One of my customers came in here and asked about it, and I said ‘What loan?’” Yang said.

By the time she asked her accountant about applying, the money was distributed. “They said, ‘Oh, too late, all the loans are gone.’

Frank Louie of the Stockton Boulevard Partnership, a group that represents the district, says there are a variety of businesses, from auto shops to restaurants.

“We’re probably one of the most diverse commercial corridors in the city,” he said, adding that he predicts the pandemic could lead to 20% of the community’s businesses closing down.

Andrew Nixon / CapRadio

He speculated it also may have been because of a lack of translation services, or just confusion among business owners for whom English isn’t a primary language.

“We just need to have more of a collaborative effort,” he said. “When the city, the state, the federal government starts rolling these programs out, we need it to be translated to our particular business corridor.”

In the days leading up to the opening of the loan applications, Jasso with the city says his office did outreach to the various different chambers of commerce, and they distributed flyers in English, Mandarin, Vietnamese and Spanish. They also did neighborhood walk-throughs in places where there wasn’t a business district, such as in North Sacramento.

He says other cities he’s spoken with struggled with the loans, too. “How do you address expediency but balance that, if at all possible, with equity?” Jasso asked.

He hoped the city would be able to make more funds available to give out another round of loans, but no plans are currently in the works.

In Oak Park, Michael Blair runs the Oak Park Neighborhood Association and agreed that even though the city did conduct outreach, the pace of the loans left more underserved communities behind.

“They’ve done a much better job than I've seen in the past,” Blair said. “The city’s always been that extra entity that’s sat out there and made moves and set policy, but never really connected with some of these underserved communities.”

He says many business owners in Oak Park told him that they didn’t qualify for a loan.

In total, Oak Park businesses received about 2% of the loans, split between one business in Central Oak Park and two in the North Oak Park area that has been rapidly gentrifying.

Blair said many business owners in the more underserved parts of Oak Park don’t have storefronts, which is a way to keep costs down.

“It could be a mechanic, it could be the folks that braid hair and go from location to location, folks that manage to make a living on their own skills,” Blair said.

In North Sacramento, an area where the city conducted on-the-ground canvassing about the loans, many businesses still feel they weren’t reached.

Julie Lynhiavue owns T and Y Market, a longstanding Hmong grocery store on Norwood Avenue north of El Camino Avenue. She said her business serves a majority low-income population, but that she only heard of the city’s loan program through a friend — and it was too late.

Her grocery store, which is family-owned and employs less than 25 people, would have used the funds to purchase extra food and to pay employees for lost hours, as the store has had to close early and open later due to stocking shortages.

“Candidly, I’m disappointed. I’m frustrated. It’s first come, first serve, and not what’s really needed,” she said of the process.

Andrew Nixon / CapRadio

Lynhiavue acknowledged that all business owners were in need right now, but that the city should have taken into account underserved areas and essential services.

“I’m trying to feed families, but a bunch of liquor stores got this,” she said. “Sometimes the quickest thing to just hand out money is not the best.”

According to a CapRadio analysis, 18 of the 101 businesses that received the loans were either bars, clubs, liquor stores, wineries or breweries.

A lot of those businesses, including restaurants and shops in the central city, may have gotten a heads-up about the loan program.

Rob Archie owns Pangaea Bier Cafe in Curtis Park and Urban Roots Brewing and Smokehouse in downtown. Both businesses are black-owned, but operate in more well-connected, well-resourced areas. He says he got advance notice of the loan program from a business association he used to be a part of, Regions Restaurant Group.

“When everything first happened, we actually jumped on a conference call with the mayor, City Council officials, and he kind of let us know he had this in the works and be ready to apply the following week,” he said.

Josh Wood, the head of Regions Restaurant Group, said he requested the call with the mayor’s office when he saw a first wave of restaurants starting to take a hit in business during early March.

“I called the mayor the morning of and I said, ‘This is what we’re talking about, we know what’s going on in the Bay, restaurants are closing, and we’re worried,’” Wood said.

He says he spread the word about the call among his group’s members, and also encouraged people to invite other restaurant owners. In total, about a hundred restaurateurs were on the call, according to Wood.

In the end, though, even he was disappointed with the loan disbursement.

“I think the city needs to open another loan program, they need to absolutely create some geographic parity on the loan program and they need to look at legacy businesses, meaning if you’ve been in business as a restaurant for five or 10 years more, you should be the ones getting funded,” he said.

CapRadio reached out to the mayor’s office, and that of Councilman Steve Hansen, who represents the central city, to discuss the loan program.

Restaurants have been particularly hard hit by the stay-home order.

Archie said his cafe has lost about 25 percent of its business as a result of having to do takeout orders only, but that his brewery has been holding up, as they conduct a lot of business through selling wholesale to supermarkets.

Pangaea received around $13,000 from the city and Urban Roots Brewery received $25,000. The city allocated both amounts based off of how many employees work at each business.

“Our No. 1 priority is just keep people working, so that’s what I plan to do” with the loan money, Archie said.

According to CapRadio’s analysis, restaurants, breweries and other food and beverage businesses were some of the biggest recipients of these loans, getting around 73% of the loan funds, with almost half of them clustered in Midtown and downtown.

Over 40 percent of the loan money went to restaurants.

Loans maxed out at $25,000. The city also gave out a number of “micro” loans to businesses with five or fewer employees, which were capped at $5,000.

Half of the loans given were for that amount, and six businesses including Urban Roots received the max amount of $25,000: Flatstick Pub and The Melting Pot in downtown, New Glory Craft Brewery in South Sacramento, Viva Supermarket in Del Paso Heights and Habitat for Humanity Sacramento.

Other businesses that received proposed loans include cannabis dispensary Medizen in Arden Fair Mall, arts organizations like Capital Stage, the Sierra 2 Center and CLARA Center for the Arts; The Makers Place coworking space in Curtis Park and a variety of others.

Andrew Nixon / CapRadio

Seven bars received loans, including Pine Cove Tavern and Flamingo House in Midtown, and four additional breweries: At Ease, King Cong, New Helvetia and Bike Dog.

Other restaurants that have been offered loans of more than $13,000 include Broderick Roadhouse Midtown, Canon, La Venadita, El Novillero, Capitol Garage, Cornerstone Cafe, Federalist Public House, Banzai Sushi, Foundation, Osaka Sushi, Southpaw Sushi, Origami Asian Grill and New Hong Kong Wok.

To help many of the businesses that were not able to get a loan through the city, the Asian Pacific Chamber of Commerce has been working on creating a small business “triage” program.

The chamber is looking to try to help small business owners connect and apply for other local, state and federal dollars that are becoming available.

A GoFundMe page was also created and recently distributed microgrants to restaurants and bars in need.

The Sierra Health Foundation’s Donate4Sacramento fund also has been giving out grants to neighborhood business associations, such as the Stockton Boulevard corridor that was overlooked in the city’s loan program.

Those groups say they will be giving out grants of up to $1,000 to small businesses in the coming days.