Abstract
The paper uses newly released Small Business Pulse Survey data on small business' response to questions about overall COVID-19 impact, federal aid request, federal aid receipt, and subsequent changes in revenue and employee hours to evaluate the efficacy of three federal aid programs: Paycheck Protection Program (PPP), Economic Injury Disaster Loan (EIDL), and Small Business Administration (SBA) loan forgiveness programs. The paper finds no evidence that the severity of COVID-19 impact is related to the application and approval rate of any of the SBA assistance programs, implying that the relief funds did not reach the firms that need the liquidity injection the most. But the firms that did receive the relief funds were less likely to report revenue decrease and employee hours decline during the subsequent weeks. This result provides preliminary support to the social insurance value of the relief programs in boosting small businesses' economic activities during the COVID-19 crisis.