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The 2020 Paycheck Protection Program (PPP), which aimed to compensate people and businesses for economic losses stemming from measures to stop the spread of COVID-19, took advantage of existing private banking infrastructure rather than operating via direct applications to the government. Soomi Lee looks at how the concentration of regional banking markets affected PPP loans, … Continued

In a collaborative report with the UCLA Latino Policy and Politics Initiative (LPPI), CNK and LPPI researchers find that businesses in California's communities of color are being left behind because they are receiving far less from the $600 billion in loans through the Paycheck Protection Program.The Paycheck Protection Program was established as part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help certain businesses continue paying their workers.The new report explicates how the lack of federal support will likely widen economic inequality in communities of color, which already had fewer small businesses and jobs than majority-white neighborhoods. The analysis uses data from the Small Business Administration, the Census Bureau's ZIP Code Business Patterns Dataset and the American Community Survey.The researchers write that future federal pandemic relief efforts should earmark a percentage of funds to directly benefit businesses in disadvantaged communities, which the report finds generally have higher concentrations of residents of color.

AbstractWe examine Paycheck Protection Program (PPP) lending among African American and white farmers. Using data from the U.S. Small Business Administration we run fixed effect estimations with a Mills inverse ratio. Our findings suggest discrimination due to limited capital access. We find statistically significant differences between approved loan amounts among African American farmers due to income level and location of their farms. These had minimal effects on white farmers. Our results call for policymakers to carefully monitor the PPP distribution in areas more vulnerable to financial difficulties. We provide policy recommendations.