Essays on the Payroll Protection Program

Chunyu Qu, Fordham University


The Paycheck Protection Program (PPP) has been instrumental in providing financial assistance to small businesses during the COVID-19 pandemic. Understanding the correlations between firms' characteristics and PPP loan recipiency is important for understanding the heterogeneity in access to funding.This study utilizes a comprehensive dataset from Dun & Bradstreet for over 26 million U.S. businesses to examine the correlations between selected factors - prior borrowing experience, credit and financial stress rankings, firm size, minority status, firm age, and gender- and PPP loan recipiency in April 2020 and June 2021.The findings highlight the significance as of April 2020 of 7(a) loan experience (38.8%) and firm size (5.7%) as the two factors associated the most with loan recipiency. Moreover, firms with better credit and financial stress rankings were also significantly more likely to receive PPP loans. However, by June 2021, these correlations became very small, and sometimes not statistically significant.Furthermore, the firm’s age showed a negative but small correlation with loan recipiency in both periods. The minority status of the owner exhibited a positive correlation with loan recipiency in 2020 (9.9%), which persisted but weakened in 2021 (6.2%). Finally, the correlation between PPP recipiency and female ownership was negative in 2020 but became positive, albeit small, in 2021.These findings address an evidence gap in the PPP literature, providing insights into the relationship between various factors and PPP loan recipiency. Additionally, the study underscores the temporal changes in these correlations, shedding light on the evolving nature of PPP policies over time. These findings enhance our understanding of the factors contributing to the heterogeneity in loan access and suggest there was heterogeneity in access to PPP loans, especially in their initial phase.

Subject Area

Economics|Business administration|Finance

Recommended Citation

Qu, Chunyu, "Essays on the Payroll Protection Program" (2023). ETD Collection for Fordham University. AAI30635457.