Does FinTech Substitute for Banks? Evidence from the Paycheck Protection Program

Erel, Isil; Liebersohn, Jack

doi:10.3386/w27659

Cited by 106 publications

(30 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…Cororaton and Rosen (2020) also study publicly traded firms and find that smaller public firms with more employees, fewer investment opportunities, and COVID-19 exposure are more likely to borrow from PPP. Erel and Liebersohn (2020) find that borrowers in areas with fewer bank branches, lower incomes, and more minority population are more likely to access PPP via FinTech firms rather than banks. A number of studies show that small, community banks provide an outsized share of PPP loans (Balyuk (2020), Faulkender et al (2020, James et al (2020)).…”

Section: Introductionmentioning

confidence: 88%

Who Supplies PPP Loans (And Does It Matter)? Banks, Relationships and the COVID Crisis

Strahan

2020

SSRN Journal

View full text Add to dashboard Cite

show abstract

Section: Introductionmentioning

confidence: 88%

Who Supplies PPP Loans (And Does It Matter)? Banks, Relationships and the COVID Crisis

Strahan

2020

SSRN Journal

View full text Add to dashboard Cite

show abstract

“…Other studies include Bartik, Cullen, Glaeser, Luca, Stanton, and Sunderam (2020) and Bartlett and Morse (2020), who find positive impacts on very small businesses. Erel and Liebersohn (2020) examine the role of FinTech firms in PPP lending. Cororaton and Rosen (2020) report the characteristics of PPP applicants for a sample of 424 applicants, which are similar to those for our somewhat larger sample in Section IV.…”

Section: A Finance Related Covid-19 Researchmentioning

confidence: 99%

Indirect Costs of Government Aid and Intermediary Supply Effects: Lessons From the Paycheck Protection Program

2020

View full text Add to dashboard Cite

“…Erel and Liebersohn (2020) examine the behavioral elements of non-bank lender participation in the PPP and find that they served as complements to bank lending by lending disproportionately…”

mentioning

confidence: 99%

Small Business Lending Under the PPP and PPPLF Programs

López¹,

Spiegel²

2021

ERWP

View full text Add to dashboard Cite

We examine the effects of the Paycheck Protection Program (PPP) and the PPP Liquidity Facility (PPPLF) on small business lending. The PPP was launched under the CARES Act of March 2020 to provide support for small businesses under the COVID-19 pandemic, while the PPPLF was an affiliated program administered by the Federal Reserve to facilitate the maintenance of liquidity among banks participating in the PPP. We use Call Report data to examine the contributions of these two programs on small business and farm lending by individual commercial banks in the United States. As participation in the programs was associated with lending to small businesses directly, we use an instrumental variables (IV) approach to identify a causal effect of the programs on lending based on historical bank relationships with the Small Business Administration that administered the PPP. Our results suggest that both the PPP and the PPPLF had a marked positive effect on growth in small business and farm lending over the first half of 2020. However, while the PPP seemed to encourage greater lending growth by banks of all asset sizes, only small- and medium-sized bank lending was significantly influenced by participation in the PPPLF. We also find that while both programs had significant positive effects on small business lending, they did not influence small loans to farms over this period, which is likely due to a structural feature of the PPP. Finally, while participation in both programs increased bank balance sheets, we find that risk-adjusted bank capital ratios actually improved with PPP and PPPLF participation.

show abstract

Does FinTech Substitute for Banks? Evidence from the Paycheck Protection Program

Cited by 106 publications

References 0 publications

Who Supplies PPP Loans (And Does It Matter)? Banks, Relationships and the COVID Crisis

Who Supplies PPP Loans (And Does It Matter)? Banks, Relationships and the COVID Crisis

Indirect Costs of Government Aid and Intermediary Supply Effects: Lessons From the Paycheck Protection Program

Small Business Lending Under the PPP and PPPLF Programs

Contact Info

Product

Resources

About