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Did Changes to the Paycheck Protection Program Improve Access for Underserved Firms?

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Abstract

Prior research has shown that many small and minority-owned businesses failed to receive Paycheck Protection Program (PPP) loans in 2020. To increase program uptake to underserved firms, several changes were made to the PPP in 2021. Using data from the Federal Reserve Banks’ 2021 Small Business Credit Survey, we argue that these changes were effective in improving program access for nonemployer firms (that is, businesses with no employees other than the owner(s)). The changes may also have encouraged more applications from minority-owned firms, but they do not appear to have reduced disparities in approval rates between white- and minority-owned firms.

Suggested Citation

  • Nathan Kaplan & Claire Kramer Mills & Asani Sarkar, 2022. "Did Changes to the Paycheck Protection Program Improve Access for Underserved Firms?," Liberty Street Economics 20220706, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:94429
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    File URL: https://libertystreeteconomics.newyorkfed.org/2022/07/did-changes-to-the-paycheck-protection-program-improve-access-for-underserved-firms/
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    More about this item

    Keywords

    Paycheck Protection Program;

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers

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