Community Banks Played Crucial Role In First Round Of PPP Funding

The first round of the Paycheck Protection Program (PPP) funding for small businesses ran out quickly, with distribution varying significantly by state. Red states received more funding per payroll dollar than blue states, but the presence of community banks was a stronger factor in funding distribution. Community banks, which have been declining, still dominate in rural areas and were more effective in processing PPP loans due to existing relationships. States with fewer community banks, like Nevada, received less funding. The second round of funding aims to address these disparities, with $60 billion earmarked for smaller banks.

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