Urbanization, Community Demographics, and the Distribution of Paycheck Protection Program Loans Across Counties

The COVID-19 pandemic created a significant disruption in economic activity across the United States. On March 27, 2020, the U.S. government passed the Paycheck Protection Program (PPP) as part of the CARES Act to offer loans to businesses. While the loans have been shown to be successful at keeping businesses running and reducing unemployment (Bartik, Cullen, et al., 2020; Humphries et al., 2020), their spatial distribution has not been studied using data on all loans issued. This paper analyzes the predictors of how many per capita loans were received at the county level using data from the Small Business Administration, the American Community Survey, County Business Patterns and others. We find that communities with more eligible businesses, more banks available, and larger increases in their unemployment rate received more loans per capita. Conversely, larger numbers of COVID-19 cases were associated with receiving fewer loans. In addition, wealthier, whiter, and less urban counties also received a larger number of loans.