Business Loans, COVID, and Racial Disparities
COVID-19 imposed financial burdens on many Americans, however, there is some evidence that the extent to which COVID impacted the financial stability of businesses is correlated with an owner's race and gender. In this paper, NYU's Sabrina Howell, Theresa Kuchler, Johannes Stroebel, Jun Wong, and Ocrolus' David Snitkof examine racial disparities in the context of the Paycheck Protection Program (PPP). They find that small, local banks were less likely to lend to Black-owned businesses than other businesses, while Top-4 banks exhibited no patterns of racial discrimination. The authors further compare the borrowing habits of Black-owned businesses and non-Black businesses, and the potential discrimination behind decisions to apply for financial support. Read and find out more here!
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