Rural states that backed President Donald Trump enjoyed greater access to the first round of coronavirus relief funds than Democratic states on the coasts.
There's no proof that regional or political bias played a role in the distribution of funds from the Paycheck Protection Program, but the disparity will get piled onto a stack of complaints about the program, which is already sending out a second round of assistance, reported Bloomberg.
“It is incongruous that these rural states are benefiting most as they have been for the most part least hurt by the virus,” said Mark Zandi, chief economist for Moody’s Analytics. "[The program] has fallen well short of helping small businesses in the states that have been hardest hit by the virus.”
Eight of the 10 states that had the largest shares of approved loans backed Trump in the 2016 election.
Nebraska firms, for example, got enough money to pay 81 percent of the solidly Republican state's payrolls, which is more than double the share for New York and California -- two strongly Democratic states hit much harder by the outbreak, according to Evercore ISI economist Ernie Tedeschi.
Another study found that only 15 percent of firms in congressional districts that have been hardest hit by the virus received loans in the first round of relief, compared to 30 percent of firms in those least affected.
Primarily rural industry sectors such as oil and gas got loans covering 83 percent of their eligible payroll, while manufacturing got 73 percent and agriculture 46 percent.
That's compared to a national figure of 54 percent.
The nation's four largest lenders -- JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co., and Citigroup Inc. -- typically account for more than one-third of all small business loans, but they disbursed less than 3 percent of PPP loans in the first round.
About 60 percent of PPP loans were handed out by banks with no more than $10 billion in assets, which usually account for less than 20 percent of commercial and industrial lending.Rur