Skip to main content
OCC Flag

An official website of the United States government

December 2020

The Geography of Pandemic Stress and PPP Lending

This publication is part of:

Collection: On Point


The Paycheck Protection Program (PPP) was a key component of the fiscal stimulus enacted to stem the economic distress arising from the pandemic-induced shutdowns. The unprecedented economic disruption differed by sector and geography. "High-touch" industries, particularly leisure and hospitality, transportation, and retail, which were directly affected by social distancing measures proved particularly vulnerable and experienced more stress than other industries in which remote work and other accommodations mitigated the adverse pandemic effects. Not only did the banks serving the areas with the highest employment risk experience the greatest acceleration in total loan growth, but the share of PPP loans to total loans was the highest among these banks. The pandemic's effects stressed small business cash flows particularly in areas with high employment risk, increasing their need to supplement cash flow by borrowing from local banks; the PPP program played a big role in meeting that demand.


Anne Kerttula, Eleni Sherman and Paul Moloney