JFE-金融科技能缩小融资渠道的差距吗？来自薪资保护计划的证据-

/10.1016/j.jfineco.2022.05.004

0304-405X/©2022ElsevierB.V.Allrightsreserved.

JournalofFinancialEconomics146(2022)90–118

Contentslistsavailableat

ScienceDirect

JournalofFinancialEconomics

journalhomepage:

/locate/jfec

CanFinTechreducedisparitiesinaccesstofinance?Evidence

fromthePaycheckProtectionProgram

IsilErel

a

,

b,

c

,JackLiebersohn

d

,

*

aTheOhioStateUniversity,DepartmentofFinance,Columbus,43210OH,USA

bNBER,UnitedStates

cECGI,Belgium

dUniversityofCalifornia,Irvine,DepartmentofEconomics,3151SocialSciencesPlaza,Irvine,CA92617,USA

articleinfo

Articlehistory:

Received20November2020

Revised16May2022

Accepted17May2022

Availableonline27July2022

JELclassification:

E6

G21

G23

G28

G38

H25

Keywords:

Financialtechnology

PPP

Coronavirus

Financialinclusion

Nonbank

Onlinebank

abstract

Newtechnologypromisestoexpandthesupplyoffinancialservicestosmallbusinessespoorlyservedbybanks.Doesitsucceed?WestudytheresponseofFinTechtofinancialser-vicesdemandcreatedbytheintroductionofthePaycheckProtectionProgram.FinTechisdisproportionatelyusedinZIPcodeswithfewerbankbranches,lowerincomes,andmoreminorityhouseholds,andinindustrieswithfewerbankingrelationships.ItisalsogreaterincountieswheretheeconomiceffectsoftheCOVID-19pandemicweremoresevere.Sub-stitutionbetweenFinTechandbanksiseconomicallysmall,implyingthatFinTechmostlyexpands,ratherthanredistributes,thesupplyoffinancialservices.

©2022ElsevierB.V.Allrightsreserved.

1.Introduction

TheCOVID-19pandemiccreated“acrisislikenoother,”withaglobaleconomiccontractionof3.1percentin2020.

1

Tosupportsmallbusinessesthroughthecrisis,theU.S.governmentcreatedthePaycheckProtectionProgram(PPP),whichofferedguaranteedandpotentially-forgivablesmallbusinessesloans.

2

With$669billiontobedisbursedoveraperiodofafewmonthsin2020,thePPPwas

*Correspondingauthor.

E-mailaddresses:

erel@fi

(I.Erel),

cjlieber@

(J.Liebersohn).

1WorldEconomicOutlookUpdate,InternationalMonetaryFund,Octo-ber2021.

unprecedentedinspeedandscale.

3

Tomeettheextraordi-narydemandfortheloans,theSmallBusinessAdministra-tion(SBA)madethelast-minute,first-time-everdecisiontoapproveanumberofnon-traditionallendersspecial-izinginFinancialTechnology(FinTech)todistributePPPfundsdirectlyalongsidetraditionalbanks.

4

WhateffectdidallowingFinTechstoparticipatehaveontheprovision

2PPPisanimportantpartoftheCoronavirusAid,Relief,andEconomic

Security(CARES)Act:See/funding-programs/loans/

coronavirus-relief-options/paycheck-protection-programasofMarch

2022.

3Forcomparison,the7(a)program,whichisSBA’smainlendingpro-gram,hasguaranteedbetween$10billionand$20billionperyearsince2010.

91

I.ErelandJ.Liebersohn

offinancialservicesandonfinancialinclusionforsmallbusinesses?Ourpaperanswersthisimportantquestion.

Thismulti-billion-dollar“experiment”toapproveFin-TechlenderswiththeexogenousdemandshockcreatedbytheCOVID-19crisisandthePPPprogramprovideauniqueopportunitytostudyhowFinTechchangesthesupplyoffi-nancialservices.Non-traditionalandFinTechlendersarearelativelynewbutrapidlygrowingphenomenon.Howtheyimpactthecommercialcreditmarketwillhaveimportantconsequencesforsmallbusinesses’creditaccess,especiallyinZIPcodeswithlimitedaccesstothebankingsystem.

WefindthatFinTechisdisproportionatelyusedinar-easwithfewerbankbranches,lowerincomes,andalargershareoftheminoritypopulation.Whenwefocusonar-easwithbankbranchesandstudysubstitutionbetweenFinTechlendersandtraditionalbanks,wefindthatthesubstitutioniseconomicallysmall,indicatingthatFinTechlendersarereachingnewtypesofcustomers–i.e.,smallbusinessesinareasunderservedbythebanks.

WhywasthedecisiontoapproveFinTechlendersun-usual?AlthoughtheroleofFinTechhasincreasedinthefinancialservicesindustry,allowingfinancialintermedia-tionbyFinTechlendersremainscontroversial.

5

RegulatorshavearguedthatFinTechlendersrequiremoreregulation

(BrooksandCalomiris,2020

);andlawmakershavebeenparticularlyconcernedaboutwhetherFinTechsactinamorediscriminatorywaythantraditionalbanks.

6

YetFin-Techshavearguedthattheyarelessdiscriminatorybe-causetheydonotrelyonrelationshipsorface-to-facein-teractionswithcustomers.

7

Givenbankregulators’ongoingconcernsonracialandincomedisparitiesinaccesstofi-nance,ourfindingshaveimplicationsforhowFinTechex-pansionaffectsthesmallbusinesslendingmarket,whereSBA-backedloanshavematerialimportance.

OurfirstquestioniswhetherFinTechsprovidedmoreaccesstoPPPloansinareaswheretheseloanswereneededmore.Traditionalfinancialinstitutions(i.e.,deposi-toryinstitutions)havebeenshowntobeinefficientintheirallocationoffinancialservicesacrosscustomersofdiffer-entsizes,locations,anddemographics(Philippon,2015;Harveyetal.,2021).And,intheparticularcaseofallocat-ingPPPloans,bankshavebeenheavilycriticizedbythepopularmediaforfavoringtheirrelationshipborrowersattheexpenseofsmallerfirmsthatwerehithardestbythepandemic.

8

Granjaetal.(2020)

showthatduringPhase1ofthePPPprogram,banksdidnotallocatecredittoregionswhereitwasneeded.Weshowthatatthistime,FinTechlendersprovidedmorePPPloansthantraditionalbanksto

4AccordingtoNon-FederallyRegulatedLenderlaws,FinTechlenderswithastatebankinglicensecannotparticipateinSBA’sloanprogramsunlesstheypartnerwithaqualifyingbank.

5See,e.g.,

Buchaketal.(2018)

,

Chernenkoetal.(2019)

,GopalandSchnabl(2020),

Stulz(2019)

,

Liebersohn(2020)

,andGopalandSchn-abl(2020).

6/sites//files/Fintech_Report_1.pdf;/news-issuances/news-releases/2020/nr-occ-2020-112.htmlasofMarch2022.

7Seehttps://www.fi/2020/03/

can-fintech-eliminate-credit-discrimination/asofMarch2022.

8E.g.,“BanksGaveRichestClients‘ConciergeTreatment’forPandemicAid,”NYT,April2020.

JournalofFinancialEconomics146(2022)90–118

areaswithaworseeconomicshock.StudyingPhase2oftheprogramleadstointerestingfindingsaswell:WhilebothtraditionalbanksandFinTechlendersprovidedmorePPPloanstotheareaswithahigherCOVID-19caserateandmoreunemploymentclaims,theresponseoftheFin-Techlenderswasabouttentimeslarger.

Second,westudywhetherFinTechlendersprovidedPPPloanstobusinesseswithlimitedpreviousaccesstothebankingsystemrelativetotraditionalbanks.Surveyev-idenceshowsthatminority-ownedsmallbusinessesarelesslikelytoaccesscreditthrougharelationshipwithabankandarelesssatisfiedwiththerelationshipstheydohave(FederalReserveBankofAtlantaSmallBusinessCreditSurvey,2019).Minority-ownedsmallbusinessesarealsomorereliantonSBAloansthanwhite-ownedbusi-nesses,eventhoughpureFinTechlendersarecurrentlynotallowedtoparticipateinthismarket.Comparingborrowerslocatedinthesamecounty,weshowthatborrowersinZIPcodeswithfewbankbranches,lowerincomes,andalargernon-whiteshareofthepopulationweremorelikelytogetaloanfromaFinTechlender.Moreover,relativetoFin-Techlenders,traditionalbanksprovidedahigherfractionofPPPloanstofirmsinindustrieswithstrongertiestothebankingsystem.OurfindingsshowthatbanksbasetheirPPPloansonpastrelationships,andtheyaregeographi-callyconstrainedbythelocationoftheirphysicalbranches,unlikeonlineFinTechlenders,wherepriorrelationshipsarelessrelevant.

Third,weaskwhetherFinTechlenders“expandthepie”offinancialservicesormerelyredistributeit.Evenforborrowersthatcouldaccesstraditionalbanks,Fin-Techslendersmaybequickerormoreconvenient,as

Buchaketal.(2018)

showformortgageloans,especially

duringtheearlyphasesofthePPPprogram.TostudywhethersmallbusinessessubstitutetoFinTechlenderswhenlocalbanksarelessresponsivetotheirdemandforPPPloans,weuseanapproachthatisakintoashift-share(“Bartik”)designtopredictlocalbankresponsivenessindependentofthemagnitudeoftheCOVID-19shock.WefindthatborrowersrespondtoalackofbankPPPprovi-sionbysomewhatsubstitutingtoFinTechlenders.Butthissubstitution,whichissignificantstatistically,isonlyabout27percentofthedecreaseintraditionalbanklending.Overall,weshowthatFinTechlendersexpandedtheaccesstothePPPprogrambutdidnotfullyclosethegapinfinancialservicesacrossregionswherebanksoperate.

ItisimportanttonotethattheincentivesinplayforPPPloanoriginationaredifferentfromstandardcreditasPPPloansarepotentiallyforgiven.Nevertheless,ourresultsspeaktothedifferencesintheuseofbankingrelationships—asmeasuredbybranchnetworks—andnewtechnologytoallocategovernment-backedcredit,whichisanimpor-tantpartofsmallbusinessborrowing.Therefore,ourfind-ingshaveimportantimplicationsforthepotentialeffectsofallowing(more)FinTechlenderstoparticipateinany

typeoffullyorpartially-guaranteedgovernmentloanpro-gram(e.g.,SBA7aloans).

9

AllowinggreaterFinTechpartic-

9See,e.g.,

Craigetal.(2008)

showingpositiveeffectsofSBA-backedloansonemploymentinlow-incomeareas.

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I.ErelandJ.Liebersohn

ipationhasthepotentialtoincreasetheefficiencyofsmallbusinesslendingevenduringnon-crisisperiods.

2.Literaturereview

RecentliteratureinvestigatesvariousaspectsofthePPPprogram.OurpaperisthefirstonetofocusonhowFin-TechlendersaffectedfinancialaccesstoPPPloansbysmallbusinessesinareastraditionallyunderservedbybanksandforborrowerswithfewconnectionstobanks.OurfindingsarealsorelatedtoresearchonthedifferencesbetweenFin-Techlendersandbanks,andmorebroadly,onhownon-banklendersrespondtoshocks.

Ourpaperismostrelatedtotworecentcomplemen-tarypapersfocusingonracialdisparitiesinaccesstoPPPloans.

ChernenkoandScharfstein(2021)

focusontheroleofracialbias.TheyshowthatBlack-andHispanic-ownedrestaurantsinFloridaweresignificantlylesslikelythanwhite-ownedonestogetPPPloans,evencontrollingforbanknetworks.

Howelletal.(2020)

studytheroleofau-tomation.TheyshowthatFinTechlendingandswitchingtoautomatedlendingprocessesbytraditionalbankshelpin-creaseaccesstothePPPloansbyBlack-ownedbusinesses.Differentlyfromthesepapers,ourworkfocusesonhowFinTechhelpedclosethegapinaccesstoPPPcreditinar-easwithfewerbankbranchesandalargershareoftheminoritypopulation.WecontrastFinTechswithtraditionalbanks,whichrelyonexistingbranchnetworkstosupplyPPPloans.

SeveralpapershavefocusedonwhoreceivedPPPloans,especiallyinthefirstfewweeksoftheprogram.WhilethesepapersincludeFinTechsintheirsamplealongsideotherlenders,mostdonotshowthatFinTechsbehaveddif-ferentlythanbanks,aswedo.

LiandStrahan(2020)

focus

ontheroleofcloserelationshipswithbanksforaccess-

ingthePPPloans.

Balyuketal.(2021)

alsofindthatbank-ingrelationshipsmatter:largerborrowersreceivedthePPPfundsearly,andthispreferentialaccessbylargerbor-rowersconcentratesismostpronouncedattop-10banks.

CororatonandRosen(2021)

studypublicfirmsthatgotfundingthroughthePPPandreceivedsignificantmediaoutrageasaresult.Otherpapershaveaskedwhethertheprogramwaseffectiveathelpingborrowerswhoneededitmost.

Granjaetal.(2020)

showthatbanks,inthefirstphaseoftheprogram,targetedregionsthatwerelessad-verselyaffectedbythepandemicandstudyitsfutureem-ploymenteffects.

10

Ourpaperalsocontributestotheliteratureonthedif-ferencesbetweennon-banklendersandtraditionalbanks.BeyondthesettingoftheCOVID-19pandemic,severalpapersstudyloansupplyfollowingnaturaldisasters.

Morse(2011)

showsthatpaydaylendersfacilitateac-cesstofinancefollowingdisasters,andCortesandStra-han(2017)showthattraditionalbanksreallocatecapitalacrossregions.Tothebestofourknowledge,thereare

10WealsocontributetoabroaderliteraturestudyingtheconsequencesoftheCOVID-19crisisonfinancialandcapitalmarkets(see,e.g.,GreenandLoualiche,2021;Fahlenbrachetal.,2020;PastorandVorsatz,2020;Hallingetal.,2020;Falatoetal.,2021;Bartiketal.,2020;Faulkenderetal.,2020;Lynch,2021).

JournalofFinancialEconomics146(2022)90–118

nopapersfocusingonthedisasterresponseofFinTechsinparticular(andhowitdiffersfrombanks).Beyondthesettingofdisasters,researchonFinTechshasfoundthat

FinTechlendersprocessloanapplicationsfasterthantradi-tionalbanks,improvingtheefficiencyoffinancialinterme-diationinmortgagemarkets,buttheydonotnecessarilyserveunderservedborrowerswithlowaccesstofinance.

11

GopalandSchnabl(2020)

showtheincreasingimportanceofFinTechlendingforsmallbusinesses,wherethesam-pleincludesasset-backedloanstopurchasedurablegoods.Unregulatedfinancecompanieshavetraditionallybeenkeyplayersinthismarket,andtheirrolehasincreasedevenmoreafterthe2008FinancialCrisis,asshownbytheauthors.

12

Balyuketal.(2020)

studycommercialloansthroughonlinelendingplatformsandshowtheimportance

ofbankingrelationshipsforsmallbusinesses.Inasettingwherethereisnocreditassessmentbasedonsoftinforma-tion,wefindthatFinTechlendersreachawiderborrowerbasewhilebanksremainconstrainedwithintheirbranchnetworks.OursisthefirstpapertofocusonhowFinTechscanprovidefinancialservicestosmallbusinessesinunder-servedareas,includingneighborhoodswithahighshareoftheminoritypopulationandlowmedianincomes.

BeyondthePPPprogram,ourfindingson“expandingthepie”ofaccesstoPPPloanscontributetothelitera-tureonfinancialinclusion.Thisliteraturehasmostlyfo-cusedonhouseholds,butafewpapershavealsostud-iedsmallbusinessesinminorityandlow-incomeneigh-borhoods.

13

Begleyetal.(2020)

andChatterjiandSea-mans(2012)showhowdifferenttypesofregulations—onSBAloansandoncreditcards—canhinderfinancialaccessforminority-ownedsmallbusinesses.Wefocusonadiffer-

entsourceofcreditthanthesepapers,butlikethesepa-pers,wefindthatderegulatingcreditsupplyhasthegreat-estimpactonborrowerswithpooraccesstothetraditionalbankingsystem.

3.Payrollprotectionprogramanddata

ThePaycheckProtectionProgram(PPP)in2020autho-rizedupto$669billiontowardjobretentionbysmallbusi-nesseswith500orfeweremployees.

14

Theprogrampro-

11Thereisalsoagrowingliteratureononline,peer-to-peer,unsecuredpersonalloans(see,e.g.,

Morse,2015

,forareview;deRoureetal.,2018;DiMaggioandYao,2021;Tang,2019;ValleeandZeng,2019;BastenandOngena,2020;Carlinetal.,2020,formorerecentpapers).

12See,also,

Hansonetal.(2015)

;

Butleretal.(2016)

;

Coleetal.(2019)

;

Cortesetal.(2020)

;

MillsandDang(2021)

,and

Chernenkoetal.(2019)

showinghowvariousnonbanklendershavebeenfillingthegapwhenlargecommercialbanksfacedregulatoryconstraintsand,therefore,hadtopullbackfromcommerciallending.

13RecentresearchonhouseholdfinancialinclusionintheU.S.con-textinclude

Calzadaetal.(2019)

;

Brownetal.(2019)

;CélerierandMatray(2019);

BuchakandJørring(2016)

;

SteinandYannelis(2020)

;

Bartlettetal.(2022)

,and

Fusteretal.(2021)

.Anumberofpapersstudytheeffectsofimprovedfinancialaccessindevelopingcountries,includingforsmall-andmedium-sizedenterprises(see

Barajasetal.,2020

,forareviewofthisliterature).

14Fundsweredistributedinthreephases.$342billionwasdistributedinPhase1overApril3–16,2020.Then,afterashortbreak,Phase2ranoverApril26-August8,2020,bywhichtime$525billionhadbeendis-tributed.Additionalfundsforathirdphasewereauthorizedin2021,andasofMay31,2021,atotalof278billionhadbeendistributedin2021.

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videdloanstosmallbusinessesandeligiblenonprofitor-ganizationstopayuptoeightweeksoftheirpayrollcosts,includingbenefits,interestonmortgages,rent,orutili-ties.

15

Withabout$525billionapproved—over5.1mil-lionloanspassedthrough5460financialinstitutions—byAugust8,thePPPwasoneofthelargesteconomicstim-ulusprogramsinU.S.history.Accordingtodatareportedbyprogramparticipants,itsupportedover51millionjobs,

amajorityofsmallbusinessemploymentintheUnitedStates.

TheprogramwasadministeredbytheSmallBusinessAdministration(SBA),butloanswereallocatedthroughel-igiblefinancialinstitutions.EligibleinstitutionsincludedanySBA7(a)lender,federallyinsureddepositoryinstitu-tionorcreditunion,oranyotherlenderthatwasapprovedbytheSBAandenrolledintheprogram.Lendersneitherchargedanyfeesnoraskedforcollateraltograntthesesmallbusinessloans.LoansoriginatedpriortoJune5hadamaturityof2years,whilethoseoriginatedafterJune5hadamaturityof5years.PPPloanscarriedaninterestrateof1%,butloanrepaymentwasdeferredforsixmonths.Therewasnofeechargedtotheborrowersbutlendersreceivedafeeincomeof5%forloansupto$350,000,3%forloansbetween$350,000and$2,000,000,and1%forloansabove$2,000,000,paidbytheSBA.Mostimportantly,PPPloanswerefullyforgivenifthefundswereusedatleast60%forpayrollcosts,interestonmortgages,rent,andutilities.Themajorityofloansgrantedwereforlessthan$150,000,withtheoverallaverageloansizebeing$102,697.

NotethatoursampleperiodcoversthefirsttwophasesofthePaycheckProtectionProgram,whichendedonAu-gust8,2020.Sincethen,thenewBidenadministrationad-ministeredanotherphase(Phase3)oftheprogram,whichwasdominatedinvolume(75%)byseconddrawsofPPPloansbycertaineligiblebusinesses,allocatingonlyabout$69billiondollarsofloanstofirst-timePPPborrowers(seeAppendix

TableA.1

).Excludingsecond-drawloans,over80%ofthelendingvolumefromtheentireprogramwas

approvedbyMay1,2020,and88%byAugust8,2020,whenPhase2—andoursampleperiod—ended.WeexcludePhase3loansfromoursampleduetovariouschangesintheprogram,liketheopportunityforseconddrawsbyonlyasubsetofborrowers.Themostimportantofthesechangeswasaspecial14-dayperiod,duringwhichonlybusinesseswithfewerthan20employeescouldapplytothePPPloanprogram.Notethat,consistentwithourfindingsandensuring-equitypurposeofthenewphase,thepercentageofFinTechlendersmorethandoubledin

Phase3whilethenumberofloansextendedbythemal-

mostquadrupled.

16

3.1.DataanddefinitionofFinTech

OurmaindatasourceisthedatabaseofPPPloansre-leasedbytheSmallBusinessAdministration(SBA).Itcon-sistsofloan-leveldataonallPPPloansthatwereapproved

15Tribalbusinesses,self-employedindividuals,andindependentcon-tractorsarealsoeligibleiftheymeetthePPP’ssizestandards.

16/funding-programs/loans/covid-19-relief-options/

paycheck-protection-program/ppp-dataasofMarch2022.

JournalofFinancialEconomics146(2022)90–118

bytheSBA.Thedataincludesomecharacteristicsofbor-rowersandloans.Theborrower’sZIPcodeisincluded,andindustryinformationisavailableatthe6-digitNAICSlevelforallloans.TheSBAalsoprovidedthenamesofthefinan-cialinstitutions(butnootheridentifiers)thatfacilitatedtheloanapplicationsanddistributions.

17

Wematchthisloan-leveldatatobankidentifiersfromtheFederalFinancialInstitutionsExaminationCoun-cil(FFIEC)usingthelendernamesprovided.

18

Mostlendernamescanbematchedautomatically.

19

Lenderswhichwearenotabletomatchautomaticallywematchbyhand.Forthedeposit-takingbanks,weobtainbank-levelcharacteris-tics,includingbanksize,fromJune2020Callreportsand

dataonthenumberofcommercialbankbranchesbyZIPcodefromthe2018FDICSummaryofDepositsdatabase.

WeidentifyFintechlendersasanyunregulatednon-banklenderaswellasanyregulatedonlinebankwithaFinTechfocus.Specifically,nonbanklendersarenon-depositoryfinancialinstitutions,likeKabbage,Inc.,thatgenerallyrelyonFinTechintheirlending.

20

Thesenonbanklendersarenotsubjecttotypicalbankregulationastheyarenotfinancedbydeposits.Onlinebanks,however,areregulateddeposit-takingbanksbutwithonlyoneadmin-istrativebranch.Theyalsorelyheavilyontechnologyforboththeirlendinganddeposittaking.Therefore,weclas-sifybanksinoursampleasonlinebanksiftheyexten-sivelyoperateonlinewithoneadministrativebranchonly.Tothissample,wealsoaddafewbankswithmorethanonebranch,asidentifiedby

Abrams(2019)

asonlineFin-Techbanks.AfewexamplesoftheseadditionsareAxosBank,CapitalOneBank,andtheTIAABank.AfulllistofouronlinebankFinTechlendersisprovidedintheAp-pendix

TableB.2

.NotethatonlinebanksinoursampleoftenpartnerwithindependentnonbankFinTechlenders(e.g.,WebBankpartneringwithPayPal),buttheymayalsooriginateloansdirectly(e.g.,AxosBank).Thetopthreeon-linebanks,CrossRiverBank,CelticBank,andWebBank,extendedmorethan90%oftheonline-bankPPPloanswith192,652,146,792,and75,837loans,respectively;and,theyallpartneredwithnonbankFinTechs.

OurmainmeasureofFinTechlenderscombinesonlinebankswithnonbanklenders,but,inAppendix

TableA.2

,wealsoprovideourmainresultsforthesesubgroupsofinstitutionssincetheirregulatorytreatmentisdifferent.

17Newsreportshaveraisedconcernsabouterrorsinsomeloans’datafields,especiallyfree-formtextfieldsandinformationaboutborrowerde-mographics

(Yanofsky,2020

).Ourfindingsdonotrelyonborrowers’spe-cificaddressordemographicinformation.InsofarastherearemistakesinZIPcodes,thiswouldcreatemeasurementerrorinourdependentvari-ablesandwouldnotbiastheresults.

18Specifically,weusetheAttributesFilefromtheendofJune,2020.Notethatbanklendingincludessomelendingbycreditunionsandsavinginstitutions,whicharealsodepositoryinstitutions.

19Westartbysearchingforexact,uniquenamematchesbetweenthefiles.Forunmatchedlenders,wetrysearchingforcommonvariantsoftheirnames,suchas“N.A.”inplaceof“NationalAssociation.”PPPlenderswhosenamesmatchmultiplebanksarematchedtothebankwithmorebranches.

20Somenonbanklendersinthesamplemaynotnecessarilybetradi-tionalFinTechs(suchasBusinessDevelopmentCorporations),butmostare.SeeAppendix

TableB.1

forthelargestnonbanklendersinoursam-ple.

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I.ErelandJ.Liebersohn

Moreover,forrobustness,weuseanalternativedefinitionofFinTechlenders,asidentifiedbytheSBAitselfasofMay8,thelastdayofoursampleperiod.

21

Tothislist,weaddthelistofregulatedbanksthatFinTechspartneredwith,assomenonbankFinTechlendersextendedtheirPPPloansdirectlywhilesomeothersworkedthroughtheirreg-ulatedonlinebankpartners.

22

Wehand-collecteddataonthesepartnershipsfromlenderwebsites.Inthisway,weidentifiedbankpartnersforallFinTechlendersexceptfortwo:LendioandNAVthatrunmarketplacelendingplat-forms.Lendio,forexample,statesonitswebsitethattheyhaveover50lendinginstitutions.Includingtheseinstitu-tionsinthetraditionalbankingsample,ratherthantheFintechsample,wouldonlyweakenourresults.LendersidentifiedasFinTechsinthiswayarepresentedinAp-pendix

TableB.3

.

Wematchthisdatatodemographicinformationfromthe2000DecennialCensusandthe2014–2018AmericanCommunitySurvey(ACS)

(Mansonetal.,2017

).FromtheDecennialCensus,wemeasurethefractionofthepopula-tionthatiswhite.FromtheACS,wemeasuretotalpopula-tion,medianhouseholdincome,andtraveltimetowork.

Were-codetraveltimetocreateanindicatorthatmea-suresthefractionofhouseholdsthatreportatraveltimeofover45minutes.CensusvariablesaremeasuredbyZIPCodeTabulationAreawhichwematchtoZIPcodes.Tomeasuretheeconomiccharacteristicsofestablishments—i.e.,thenumberandsizeofeligibleestablishments—ineachZIPcode,weusedatafromZIPBusinessPatterns2018dataonthenumberofestablishmentswithfewerthan500employees.Theaveragesizeofeligibleestablishmentsiscalculatedast