Washington, D.C. – The Bank Policy Institute today released PPP data from a new survey of the nine largest retail banks. The analysis looks at PPP lending within low- and moderate-income communities and predominately minority communities by large banks. BPI’s findings indicate that America’s large banks were successful in providing PPP loans to small businesses in minority and lower-income areas.
As noted in prior studies, minority-owned small businesses are disproportionately more exposed to negative financial shocks. While PPP does not address the long-standing structural vulnerabilities of the small business sector generally or of minority businesses, in particular, it may serve as a lifeline during this health and economic crisis.
“These data highlight that America’s large banks distributed much-needed credit to America’s most vulnerable small businesses in extraordinary numbers and widely across local communities,” said Greg Baer, President and CEO of the Bank Policy Institute. “While more still needs to be done beyond just the PPP, it is good to see these funds are getting into the hands of the small businesses that need it most.”
The BPI survey found:
- The largest banks have disbursed close to 1.1 million loans to small businesses.
- The average loan size was $103 thousand (smaller than the program average of $112 thousand as of June 12).
- About 39 percent of PPP loans went to businesses located in census tracts with 50 percent or greater minority population or that are classified as low- or moderate-income.
- Nearly one-in-three PPP loans (31 percent) went to businesses located in areas with 50 percent or greater minority population.
- About three-in-four loans to businesses located in minority areas and a similar share of loans to businesses located in low- or moderate-income areas went to companies with fewer than 10 employees, similar to the overall distribution of PPP loans by size of business for this group of banks.
The results are based on PPP loans originated through June 2 and include data on the neighborhood distribution of the small businesses they served. It does not specifically examine lending to minority-owned businesses as these data were not available. The participating banks were the largest nine banks as measured by their amount of deposits outstanding (Bank of America, Capital One, Citibank, JPMorgan Chase, PNC, TD Bank, Truist, US Bank, and Wells Fargo).
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About the Bank Policy Institute. The Bank Policy Institute (BPI) is a nonpartisan public policy, research and advocacy group, representing the nation’s leading banks and their customers. Our members include universal banks, regional banks and the major foreign banks doing business in the United States. Collectively, they employ almost 2 million Americans, make nearly half of the nation’s small business loans, and are an engine for financial innovation and economic growth.
