Small business lending under the PPP and PPPLF programs

Jose Lopez and Mark Spiegel

Journal of Financial Intermediation, 2023, vol. 53, issue C

Abstract: We use Call Report data to examine the effects of the Paycheck Protection Program (PPP) and the PPP Liquidity Facility (PPPLF) on small business and farm lending by individual commercial banks. As program participation was associated with small business lending, we adopt an instrumental variables approach to identify causal implications based on historical bank relationships with the Small Business Administration and the Federal Reserve’s discount window. Our results indicate that both programs encouraged lending growth over the first half of 2020. However, while the PPP encouraged greater lending across all banks, only small and medium-sized bank lending growth was significantly related to participation in the PPPLF.

Keywords: PPP; PPPLF; COVID-19; Small business administration; Bank lending (search for similar items in EconPapers)
JEL-codes: E58 E63 G14 G18 G32 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (5)

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Working Paper: Small Business Lending Under the PPP and PPPLF Programs (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinin:v:53:y:2023:i:c:s1042957322000705

DOI: 10.1016/j.jfi.2022.101017

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