Banking Deserts and the Paycheck Protection Program

The Paycheck Protection Program was a highly unusual policy measure enacted to provide bridge capital support small businesses coping with the dramatic downturn in demand due COVID-19 pandemic. By design, program effectively required potential applicants work through bank whom they had relationship. Yet large swathes of country are banking deserts, which dramatically steepen gradient for those regions’ seeking support. This paper tests proposition that exogenous distribution banks discriminated against regions where services were limited, while also looking at whether loans distributed areas less dense employment opportunities and higher concentrations businesses. authors find fewer lower systematically disadvantaged distribution, there no significant flows rates