Markets dominated by large banks see small number of PPP loans

Last update: April 20,2020

In states where community banks (deposits of $10 billion or less) held more deposits, businesses were more likely to receive Payroll Protection Program (PPP) loan funding.  In states where larger banks dominated the market, businesses received fewer PPP loans and less money was allocated per worker. The scatterplot shows a direct correlation between number of PPP loans issued and the size of banks dominant in a market.

The red trendline highlights the relationship between the percent of businesses that received a PPP loan to date and the share of bank deposits held by community banks. In general, as community bank market share rises so does the number of PPP loans made per business. This suggests that more small businesses received PPP loans in states where community banks held more deposits, and that community banks and other smaller lending institutions are vital to deploying loans to small businesses.