Following the Money Trail: The Geographic Distribution of PPP Loans

15 Pages Posted: 2 Feb 2021

See all articles by Paul Calem

Paul Calem

Bank Policy Institute

Francisco Covas

Bank Policy Institute

Adam Freedman

Bank Policy Institute

Date Written: September 30, 2020

Abstract

This paper examines the distribution of Paycheck Protection Program loan dollars per employee across U.S. counties, using loan-level data released to the public by the U.S. Small Business Administration (SBA). Our multivariate analysis indicates a positive association between the degree of economic disruption (decline in visits to the workplace) and PPP dollars per employee. This association is especially strong for PPP lending by large banks.

Additionally, we find that the PPP loan amount per employee is positively associated with the share of local small business employees at firms with fewer than twenty employees, and this association again is somewhat stronger for large banks. Specifically, we find that a county with twice the share of smaller firms receives 25 percent more PPP loans per employee from large banks compared to another county. This finding is particularly important because of concerns that smaller firms may have had greater difficulty accessing the program. Contrary to those concerns, the findings suggests that smaller firms received more benefit from the PPP program than their larger counterparts after controlling for other important factors.

Keywords: Paycheck Protection Program, COVID-19, Small Business Lending

JEL Classification: G20, G28

Suggested Citation

Calem, Paul and Covas, Francisco and Freedman, Adam, Following the Money Trail: The Geographic Distribution of PPP Loans (September 30, 2020). Available at SSRN: https://ssrn.com/abstract=3776805 or http://dx.doi.org/10.2139/ssrn.3776805

Paul Calem (Contact Author)

Bank Policy Institute ( email )

600 13th Street NW
Washington, DC 20005
United States
2025892455 (Phone)

Francisco Covas

Bank Policy Institute ( email )

600 13th Street NW
Washington, DC 20005
United States

Adam Freedman

Bank Policy Institute ( email )

600 13th Street NW
Washington, DC 20005
United States

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