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Basic facts on the coverage of the paycheck protection program

Author

Listed:
  • Mark Schweitzer

    (Federal Reserve Bank of Cleveland
    Case Western Reserve University)

  • Angela Guo

    (Federal Reserve Bank of Cleveland)

Abstract

This paper applies loan-level information from Paycheck Protection Program loans to analyze the coverage of this extraordinary lending program. Most loans were intended to be forgiven making them effectively grants. We show that loans went to a large share of small businesses across most industries in the US, especially to industries that were most negatively impacted by COVID-19 stay-at-home orders. We geocode the loans and then identify that 2021 loans were more concentrated in low- and moderate-income communities, along with census tracts where minority residents are a majority of the population. The growth of nonemployer loans and fintech lending in the program were key components of the broadened reach of the program.

Suggested Citation

  • Mark Schweitzer & Angela Guo, 2024. "Basic facts on the coverage of the paycheck protection program," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 59(1), pages 10-30, January.
    • Handle: RePEc:pal:buseco:v:59:y:2024:i:1:d:10.1057_s11369-023-00345-z
    DOI: 10.1057/s11369-023-00345-z
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    References listed on IDEAS

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    1. Erel, Isil & Liebersohn, Jack, 2022. "Can FinTech reduce disparities in access to finance? Evidence from the Paycheck Protection Program," Journal of Financial Economics, Elsevier, vol. 146(1), pages 90-118.
    2. Brett Barkley & Mark Schweitzer, 2021. "The Rise of Fintech Lending to Small Businesses: Businesses' Perspectives on Borrowing," International Journal of Central Banking, International Journal of Central Banking, vol. 17(1), pages 35-65, March.
    3. John M. Griffin & Samuel Kruger & Prateek Mahajan, 2023. "Did FinTech Lenders Facilitate PPP Fraud?," Journal of Finance, American Finance Association, vol. 78(3), pages 1777-1827, June.
    4. Robert Fairlie & Frank M. Fossen, 2022. "Did the Paycheck Protection Program and Economic Injury Disaster Loan Program get disbursed to minority communities in the early stages of COVID-19?," Small Business Economics, Springer, vol. 58(2), pages 829-842, February.
    5. T. William Lester & Matthew D. Wilson, 2023. "The Racial and Spatial Impacts of the Paycheck Protection Program," Economic Development Quarterly, , vol. 37(3), pages 243-258, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Small business lending; Credit access; Fintech; Discrimination;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • R3 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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