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

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