Abstract
We assess the role of race in loans made through the Paycheck Protection Program (PPP). The PPP program, created by the US government as a response to the COVID-19 pandemic, provides loans to small businesses so they can keep employees on their payroll. We argue that the historical record and the PPP program design choices made it likely that many Black-owned businesses received smaller PPP loans than they should have. We find that Black-owned businesses received loans that were approximately 50% lower than observationally similar white-owned businesses. The effect is marginally smaller in areas with more bank competition and disappeared over time as changes to the PPP program were implemented.
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