About

Sergey Chernenko is an Associate Professor of Finance at the Mitch E. Daniels, Jr. School of Business at Purdue University. His research focuses on private credit, financial stability, and the behavior of private credit funds under stress conditions, including the Global Financial Crisis. Chernenko's work examines the ability of private credit funds to withstand extreme stress scenarios, analyzing their deleveraging processes, default risks, and interactions with banks. He has contributed to understanding the capital adequacy of private credit funds, such as business development companies (BDCs), and their role in the broader financial system, including their growth and stability implications. His research also explores the regulatory and market dynamics influencing private credit providers, the liquidity and trading behaviors of municipal bond mutual funds, and the limitations of algorithmic measures in assessing racial disparities in finance. Chernenko's work provides insights into the stability and functioning of private credit markets, emphasizing the importance of capital adequacy, regulatory frameworks, and market behavior in maintaining financial stability.

Selected publications

• Private Credit and Financial Stability

  SSRN Electronic Journal · 2026-01-01

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• Bank Capital and the Growth of Private Credit

  SSRN Electronic Journal · 2025-01-01 · 4 citations

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• Flow-Induced Trading: Evidence from the Daily Trading of Municipal Bond Mutual Funds

  SSRN Electronic Journal · 2024-01-01 · 2 citations

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• Racial disparities in the Paycheck Protection Program

  Journal of Financial Economics · 2024-08-08 · 18 citations

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• Applications or Approvals: What Drives Racial Disparities in the Paycheck Protection Program?

  SSRN Electronic Journal · 2023-01-01 · 3 citations

  articleOpen access1st authorCorresponding
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• Applications or Approvals: What Drives Racial Disparities in the Paycheck Protection Program?

  National Bureau of Economic Research · 2023-04-01 · 6 citations

  reportOpen access1st authorCorresponding

  We use the 2020 Small Business Credit Survey to study the sources of racial disparities in use of the Paycheck Protection Program (PPP).Black-owned firms are 8.9 percentage points less likely than observably similar white-owned firms to receive PPP loans.About 55% of this take-up disparity is attributable to a disparity in application propensity, while the remainder is attributable to a disparity in approval rates.The finding in prior research that Black-owned PPP recipients are less likely than white-owned recipients to borrow from banks and more likely to borrow from fintech lenders is driven entirely by application behavior.Conditional on applying for a PPP loan, Black-owned firms are 9.9 percentage points less likely than white-owned firms to apply to banks and 7.8 percentage points more likely to apply to fintechs.However, they face similar average approval disparities at banks (7.4 percentage points) and fintechs (8.4 percentage points).Sorting by Black-owned firms away from banks and towards fintechs is significantly stronger in more racially biased counties, and the bank approval disparity is also larger in more racially biased counties.We conclude that insofar as automation by fintechs reduces racial disparities in PPP take-up, it does so by mitigating disparities in loan application rates, not loan approval rates.

  PublisherDOI

• Applications or Approvals: What Drives Racial Disparities in the Paycheck Protection Program?

  SSRN Electronic Journal · 2023-01-01 · 1 citations

  articleOpen access1st authorCorresponding
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• The Limits of Algorithmic Measures of Race in Studies of Outcome Disparities

  SSRN Electronic Journal · 2023-01-01 · 4 citations

  articleOpen access1st authorCorresponding
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• Racial Disparities in the Paycheck Protection Program

  National Bureau of Economic Research · 2022-02-01 · 51 citations

  report1st authorCorresponding

  Using a large sample of Florida restaurants, we document significant racial disparities in borrowing through the Paycheck Protection Program (PPP) and investigate the causes of these disparities.Black-owned restaurants are 25% less likely to receive PPP loans.Restaurant location explains 5 percentage points of this differential.Restaurant characteristics explain an additional 10 percentage points of the gap in PPP borrowing.On average, prior borrowing relationships do not explain disparities.The remaining 10% disparity is driven by a 17% disparity in PPP borrowing from banks, which is partially offset by greater borrowing from nonbanks, largely fintechs.Disparities in PPP borrowing cannot be attributed to lower awareness of PPP loans or lower demand for PPP loans by minority-owned restaurants.Black-owned restaurants are significantly less likely to receive bank PPP loans in counties with more racial bias.In these counties, Black-owned restaurants are more likely to substitute to nonbank PPP loans.This substitution, however, is not strong enough to eliminate racial disparities in PPP borrowing.Finally, we show that our findings apply more broadly across industries in a sample of firms that were likely eligible for PPP.

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• Why Do Firms Borrow Directly from Nonbanks?

  Review of Financial Studies · 2022-03-11 · 129 citations

  article1st authorCorresponding

  Abstract Analyzing hand-collected credit agreements for a sample of middle-market firms over 2010–2015, we find that one-third of all loans are directly extended by nonbank financial intermediaries. Two-thirds of such nonbank lending can be attributed to bank regulations that constrain banks’ ability to lend to unprofitable and highly levered borrowers. Firms with negative EBITDA and debt/EBITDA greater than six are 32$\%$ and 15$\%$ more likely to borrow from nonbanks. These firms pay significantly higher interest rates, especially following the 2013 leveraged loan guidance revisions. Nonbank borrowers also receive different nonprice terms compared to firms borrowing from banks. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

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Awards & honors

• Joint winner of the ESRB research prize in memory of Ieke va…