Bank liquidity provision across the firm size distribution

We use supervisory loan-level data to document that small firms (SMEs) obtain shorter maturity credit lines than large firms, post more collateral, have higher utilization rates, and pay spreads. rationalize these facts as the equilibrium outcome of a trade-off between lender commitment discretion. Using COVID recession, we test prediction SMEs are subject greater Consistent with this hypothesis, did not draw down whereas did, even in response similar demand shocks. PPP recipients reduced non-PPP loan balances, indicating program bolstered their liquidity alleviated shortfall.