Policy Partner:

Alliance for Community Development

RUNWAY

The Equity Toll of “Business as Usual” during the Pandemic: Can we do better?

Extant literature shows evidence of better access to financing for small businesses with existing ties to financial institutions. This study investigates whether private sector enterprises that utilize these approaches potentially contribute to the growing inequities between the affluent vs. underserved consumer groups. Using the example of the Paycheck Protection Program (PPP) during the COVID-19 pandemic, we uncover that the allocation of scarce resources by private companies did not serve the pressing needs of small business owners in socio-economically disadvantaged communities. Our results establish the importance of a timely governmental intervention and have interesting equity implications that offer prescriptive guidance to marketers and public policy makers.