The Paycheck Protection Program (PPP) from the Small Business Perspective: Did the PPP Help Alleviate Financial and Economic Constraints?

Abstract

Do business bailouts help alleviate recipient firms’ financial and economic constraints, are effects strongest for the primary targets of the bailouts, and are effects temporary or long-lasting? We address these questions for the Paycheck Protection Program (PPP) small business bailout during COVID-19. We analyze survey responses from small business owners for almost a year from the National Federation of Independent Business (NFIB) and Small Business Administration (SBA) data on PPP loans. Results suggest PPP loans significantly alleviated constraints, primarily for targeted firms – those in the most COVID-19-impacted industries, smaller firms, and firms in lower-income counties – but effects are temporary.