Fed. Reserve Bank of New York finds PPP loan distribution not correlated to COVID-19
A recent article from the Federal Reserve Bank of New York has found that Paycheck Protection Program loans are not being distributed to areas that are hardest-hit by COVID-19.
For example, less than 20% of small businesses in New York received PPP loans, and that’s the epicenter of the coronavirus in the U.S. with more than 10,000 COVID-19 cases per million population. On the other hand, nearly 60% of North Dakota’s small businesses received PPP loans, and the state has less than 1,000 COVID-19 cases per million.
The article attributes the big disparity to community banks’ preference to help those businesses with whom they have a pre-existing relationship paired with a higher percentage of community banks in certain states.