Abstract
Using a large sample of Florida restaurants, we document significant racial disparities in the utilization of the Paycheck Protection Program (PPP). Only a small fraction of these disparities can be explained by distance to bank branches. Within the same ZIP code, Black- and Hispanic-owned firms are 20.5% and 7.0% less likely than white-owned firms to receive PPP loans. These disparities in PPP utilization are driven by disparities in bank lending, which are greater in counties in which white people exhibit more racial bias against Black people. In these more racially biased counties, Black-owned businesses substitute to nonbank PPP loans and loans provided directly by the Small Business Administration through its Economic Injury Disaster Loan program.
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