Impact of Race and Gender on the SBA Paycheck Protection Program (PPP) Loan Amounts

56 Pages Posted: 11 Jun 2021

See all articles by Iryna Demko

Iryna Demko

Center for Economic Development, Maxine Goodman Levin College of Urban Affairs, Cleveland State University

Ana Claudia Sant' Anna

affiliation not provided to SSRN

Date Written: June 10, 2021

Abstract

The Paycheck Protection Program (PPP) helped to preserve employment relationships during the
sudden shutdown of economic activity due to the Covid-19 pandemic. In this paper, we analyze
access of the minority and women-owned businesses to PPP loans. Our quantitative results show
that a minority-owned business with 5 to 9 employees received a 21% smaller PPP loan than
their white-owned business counterpart. A women-owned small business with 5 to 9 employees
received a 15% smaller PPP loan than a male-owned business. Using Lee bounds, we found that
women-owned businesses in rural counties received $2,634 and $8,856 smaller PPP loans than
those in urban counties. From the interviews with PPP loan recipients in Northeast Ohio, we
learned that businesses that received smaller loan amounts had more difficulty with the loan
application process compared to businesses that received larger loans. The discrepancy in PPP
loans to women- and minority-owned businesses may have stemmed from a lack of access and
knowledge about the program itself.

Keywords: women-owned business, minority-owned business, Paycheck Protection Program (PPP)

JEL Classification: L26, R51, G18

Suggested Citation

Demko, Iryna and Sant' Anna, Ana Claudia, Impact of Race and Gender on the SBA Paycheck Protection Program (PPP) Loan Amounts (June 10, 2021). Available at SSRN: https://ssrn.com/abstract=3864218 or http://dx.doi.org/10.2139/ssrn.3864218

Iryna Demko (Contact Author)

Center for Economic Development, Maxine Goodman Levin College of Urban Affairs, Cleveland State University ( email )

Cleveland, OH
United States

HOME PAGE: http://https://urban.csuohio.edu/faculty-and-staff/iryna-demko

Ana Claudia Sant' Anna

affiliation not provided to SSRN

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
42
Abstract Views
257
PlumX Metrics