A study that involved undercover testers going directly to banks and applying for a Paycheck Protection Program (PPP) loan found that, in nearly half the cases, Black applicants got worse service than similar white applicants, said the New York Times.

The study, conducted by the National Community Reinvestment Coalition, which advocates for more capitalization for Black business owners, sent pairs of prospective PPP loan applicants to the branches of 17 banks, one Black one white. In each case, the two had highly similar credit and assets and, indeed, the researchers always made the Black applicant slightly stronger in terms of financial profile. Despite this better financial position, in 43 percent of cases, the Black borrower received worse service.

The study found that white borrowers were encouraged much more enthusiastically to take the loan and were more likely to be told that they qualify. They were also treated differently in terms of the products offered: one white applicant was not only told he qualified for the loan but was offered an additional $100,000 line of credit with the bank itself. The Black borrower who went to that same branch, who, again, had a slightly better financial position than the white borrower, did not.

The study also found gender bias as well. Regardless of race, male borrowers were more likely to be told they qualified for a loan and encouraged to take one. Borrowers who were both Black and female were never, in the entire experiment, told that they would qualify for a loan.