Distribution of Paycheck Protection Program Funding During the Covid-19 Pandemic

Distribution of Paycheck Protection Program Funding During the Covid-19 Pandemic | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Distribution of Paycheck Protection Program Funding During the Covid-19 Pandemic Thomas Krumel, Hayden Hogenson This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-6220443/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract We investigate racial disparities in the distribution of Paycheck Protection Program (PPP) loans, focusing on the third tranche and rural business impacts. Using a Cragg-Hurdle regression model, we analyze how a community's racial composition influenced PPP loan allocation. Our findings reveal a large increase in funding for majority-minority communities, particularly those with higher Black populations, during the third tranche compared to earlier rounds. This tranche introduced notable shifts in loan distribution patterns, influenced by nontraditional lenders and policy changes under the Biden-Harris Administration. We observe a marked difference in loan allocation based on racial composition and urban-rural distinctions: the Black population's share consistently correlates positively with both loan numbers and amounts, a trend amplified in the third tranche. In contrast, the relationship between the White population share and loan distribution varies, becoming less positive or more negative in different tranches and regions. These findings challenge prior assessments of racial equity in PPP loan distribution, underscoring the third tranche's critical role in shaping the overall program. Our study emphasizes the need for a revised understanding of racial disparities in PPP loan allocation, particularly in light of evolving lender practices and policy changes. Paycheck Protection Program Minority business Racial inequality Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-6220443","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":437415882,"identity":"a66d9a6f-8e37-4e69-bb71-7501db0aa414","order_by":0,"name":"Thomas Krumel","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA60lEQVRIiWNgGAWjYDACCQhlACYfVDAwNoAYPHh08KBoSThDspbENiK02Es3H93w4w+DsfmM7MQHifPuyM6fkcD44G0bHltkjqXd7G1jMJO5kbvZIHHbM+MNNxKYDefi0yKRY3aDt4HBRkIid5tE4rbDiRskEtikeQloufnnD1jL9h+Jcw4nAh3G/puQlts8bAxmIFsYEhsOJzbcSGBjxqvlRlrabdk2CWMJnrebJRKOHTbecOZhs+Scc7i1sM9IPnbzzR8bwxnsuRs/fKg5LDu/PfnghzdluLVAgQQyBxI1o2AUjIJRMAooAAC9SFPl0KjA5QAAAABJRU5ErkJggg==","orcid":"","institution":"North Dakota State University","correspondingAuthor":true,"prefix":"","firstName":"Thomas","middleName":"","lastName":"Krumel","suffix":""},{"id":437415883,"identity":"8986734c-d286-4aa9-8858-275c15e412e5","order_by":1,"name":"Hayden Hogenson","email":"","orcid":"","institution":"University of Minnesota","correspondingAuthor":false,"prefix":"","firstName":"Hayden","middleName":"","lastName":"Hogenson","suffix":""}],"badges":[],"createdAt":"2025-03-13 13:23:16","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-6220443/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-6220443/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":87714520,"identity":"3f5e301e-0226-4dce-9539-a2abef3ade2e","added_by":"auto","created_at":"2025-07-28 09:02:20","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":1464741,"visible":true,"origin":"","legend":"","description":"","filename":"DISTRIBUTIONOFPAYCHECKPROTECTIONPROGRAMFUNDINGDURINGTHECOVID19PANDEMICfinal.pdf","url":"https://assets-eu.researchsquare.com/files/rs-6220443/v1_covered_cedf5927-2505-4dad-b2e6-4b56a3c65b22.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"\u003cp\u003eDistribution of Paycheck Protection Program Funding During the Covid-19 Pandemic\u003c/p\u003e","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"Paycheck Protection Program, Minority business, Racial inequality","lastPublishedDoi":"10.21203/rs.3.rs-6220443/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-6220443/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003eWe investigate racial disparities in the distribution of Paycheck Protection Program (PPP) loans, focusing on the third tranche and rural business impacts. 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