The Effects of COVID-19 on U.S. Small Businesses: Evidence from Owners, Managers, and Employees

Coauthors: Georgij Alekseev, Safaa Amer, Theresa Kuchler, JW Schneider, Johannes Stroebel, and Nils Wernerfelt


We analyze a large-scale survey of owners, managers, and employees of small businesses in the United States to understand the effects of the early stages of the COVID-19 pandemic on those businesses. The survey was fielded in late April 2020 among Facebook business page administrators, frequent sellers on Facebook’s e-commerce platform Marketplace, and the general Facebook user population. We observe more than 66,000 responses covering most sectors of the economy, including many businesses that had stopped operating due to the pandemic. The survey asks 136 questions covering topics such as changes in business operations and employment, changes in financing patterns, and the interaction of household and business responsibilities. We characterize the adjustments implemented to survive the pandemic and explore the key challenges to continue operating or to re-open. We show how these patterns differ across industry, firm size, owner gender, and other firm characteristics

Presentations (including scheduled and co-author presentations): Empirical Management Conference

Nonbank Lending and Credit Cyclicality

Coauthors: Quirin Fleckenstein, German Gutierrez, and Sebastian Hillenbrand


We show that cyclicality in the syndicated lending market is driven by nonbank lenders. Lending by nonbanks in the syndicated lending market is nearly three times as cyclical as lending by banks, after controlling for loan and borrower characteristics. This cyclicality is explained by nonbanks’ access to financing. In busts, lack of CLO issuances and outflows from mutual funds lead to a drop in primary market originations of syndicated loans; and inflows to nonbanks during booms spur new loan originations. The higher cyclicality is not explained (nor offset) by bank behavior: banks cut originations when nonbank lenders exit the market, irrespective of their characteristics. Our paper brings forth an important reason for the decline in loan originations during both the Great Recession and the COVID-19 crisis.

Presentations (including scheduled and co-author presentations): Fed Board, Atlanta Fed and GSU Conference on Financial Stability and the Coronavirus Pandemic, Australasian Finance and Banking Conference, Midwest Finance Association, ECB-RFS Macro-Finance Conference, Swiss Winter Finance Conference of Financial Intermediation, Financial Intermediation Research Society (FIRS) (scheduled), SFS Cavalcade (scheduled)

The Rise of Finance Companies and FinTech Lenders in Small Business Lending

Coauthors: Philipp Schnabl


We document that finance companies and FinTech Lenders increased lending to small businesses after the 2008 financial crisis. We show that most of the increase substituted for a reduction in lending by banks. In counties where banks had a larger market share before the crisis, finance companies and FinTech lenders increased their lending more. By 2016, the increase in finance company and FinTech lending almost perfectly offset the decrease in bank lending. We control for firms’ credit demand by examining lending by different lenders to the same firm, by comparing firms within the same narrow industry, and by comparing firms pledging the same collateral. Consistent with the substitution of bank lending with finance company and FinTech lending, we find limited long-term effects on employment, wages, new business creation, and business expansion. Our results show that finance companies and FinTech lenders are major suppliers of credit to small businesses and played an important role in the recovery from the 2008 financial crisis.

Presentations (including scheduled and co-author presentations): AFA(2021), Nova SBE FinTech Conference, Swiss Winter Finance Conference on Financial Intermediation, Financial Intermediation Research Society (FIRS) (scheduled)

Slides: Download here

How Collateral Affects Small Business Lending: The Role of Lender Specialization (Job Market Paper)


I study the role of collateral on small business credit access in the aftermath of the 2008 financial crisis. I construct a novel, loan-level dataset covering all collateralized small business lending in Texas from 2002-2016 and link it to the U.S. Census of Establishments. Using textual analysis, I quantify whether a lender is specialized in a borrower’s collateral by comparing the collateral pledged by the borrower to the lender’s collateral portfolio. I show that post-2008, lenders reduced credit supply by focusing on borrowers that pledged collateral in which the lender specialized. This result holds when comparing lending to the same borrower from different lenders, and when comparing lending by the same lender to different borrowers. A one standard deviation higher specialization in collateral increases lending to the same firm by 3.7%. Abstracting from general equilibrium effects, if firms switched to lenders with the highest specialization in their collateral, aggregate lending would increase by 14.8%. Furthermore, firms borrowing from lenders with greater specialization in the borrower’s collateral see a larger growth in employment after 2008. I identify the lender’s informational advantage in the posted collateral to be the mechanism driving lender specialization. Finally, I show that firms with collateral more frequently accepted by lenders in the economy find it easier to switch lenders. In sum, my paper shows that borrowing from specialized lenders increases access to credit and employment during a financial crisis.

Awards: Best PhD Student Paper, Young Scholars Finance Consortium

Presentations (including scheduled and co-author presentations): University of Rochester (Simon), University of Florida (Warrington), Georgia Institute of Technology (Scheller), University of Houston (Bauer), Southern Methodist University (Cox), Federal Rerserve Bank of New York, Indiana University (Kelley), Federal Reserve Board of Governors, Johns Hopkins University (Carey), Indian School of Business, Showcasing Women in Finance Conference (2020), Texas A&M Young Scholars Finance Consortium (2020)

Internet Appendix: Download here