North Dakota, South Dakota, and Nebraska were able to score the largest number of PPP loans relative to the number of small businesses in each state, according to the Small Business Administration.
What do those Midwesterners have going for them? Local banks that jumped into action and neighbors helping neighbors, Inc. reports.
Regional and community banks in less-populated areas like North Dakota are better at dispersing PPP loans than large national banks with a dominant presence in cities, says Constantine Yannelis, an assistant professor of finance at the University of Chicago Booth School of Business. Yannelis is one of the co-authors of a joint study by the University of Chicago and the Massachusetts Institute of Technology that analyzed the first wave of PPP disbursement.
For example, 15% of North Dakota businesses got PPP loans in the first tranche. By comparison, only 3.69% of New York businesses received PPP loans in the same tranche. A similar pattern occurred in the second tranche, which is still open: 25.71% of North Dakota businesses got PPP loans compared with New York’s 13.03%.
For comparison, 5.95% of Louisiana businesses received funding in the first wave of the program, and 14.84% in the second tranche.
The banks’ ability to deliver is telling. And the phenomenon played out in Baton Rouge as well, with smaller banks able to more quickly process loan applications than others, as reported by Daily Report earlier this month.
Read the full story from Inc. which features maps that show the percentage of businesses that received loans in each state.
