Abstract
The relationship between borrowers and lenders can reveal a lot of information regarding loan pricing, information costs, and competition. In this study, the authors investigate the impact of FinTech lenders on Paycheck Protection Program (PPP) loan disbursement. Specifically, the authors investigate financial technology companies’ ability to provide loans at greater distances, expanding the available resources for businesses struggling during the Covid-19 pandemic. The authors find that not only were FinTechs able to lend at greater distances, but also they provided loans to firms that were younger and had less bank competition in their headquarters’ zip codes. The results remain consistent and are generalizable to the complete population of PPP loans.
Blake Rayfield
Assistant Professor of Finance
Blake Rayfield, PhD, is an Assistant Professor of Finance at the University of North Florida and a Fulbright Specialist. His research focuses on Financial Technology, Corporate Finance, and Investments.