By Akane Otani

New York City small businesses got disproportionately fewer loans from the federal government's Paycheck Protection Program than parts of the country that weren't as hard hit by the coronavirus pandemic, a city comptroller report says.

Only 12% of the roughly 1.1 million employee-based and nonemployer businesses in New York City received a PPP loan, according to the report set to be released Wednesday. By comparison, more than 20% of businesses in states that were less economically affected by the pandemic -- like North Dakota, South Dakota and Nebraska -- got federal aid, the report says, based on roughly three months of federal data on the program through June 30.

Small businesses in Montana, Kansas, Iowa and Wyoming also received a higher share of PPP loans than businesses in New York City, the report says.

"New York City is the economic engine of the nation, and PPP loans should be a lifeline to our businesses that have been ravaged by the Covid-19 pandemic," Comptroller Scott Stringer said in a statement.

The $670 billion emergency relief program, which sped through Congress with bipartisan support and began accepting applications on April 3, helped save tens of millions of jobs from elimination, economists say. But the program -- which has also benefited larger, well-heeled and politically connected organizations -- has faced accusations that it failed to aid many of the nation's smallest and most vulnerable businesses.

The Small Business Administration, which runs the PPP, didn't immediately respond to a request for comment on Mr. Stringer's report. The agency has said the data it has released show the program's success in helping a range of businesses.

"The PPP is an indisputable success for small businesses, especially to the communities in which these employers serve as the main job creators, " SBA Administrator Jovita Carranza said earlier this month.

The comptroller's report found PPP funding disparities among the city's five boroughs. In the hard-hit Bronx, 40% of small businesses were granted PPP loans, below the citywide average of 50% and the lowest share of the five boroughs. The comptroller's report also showed disparities across sectors, with just 22% of nursing homes and mental health facilities receiving PPP loans, compared with 66% of management consulting firms and 55% of legal services firms.

When the program first launched, businesses were required to spend 75% of their loans on payroll within an eight-week period to have them forgiven. That made it difficult, if not impossible, for many businesses that shut down during the pandemic to take advantage of the program.

The challenge was heightened for businesses in New York, which was hard hit early on in the pandemic and one of the first jurisdictions in the country to order shutdowns affecting broad swaths of its economy.

Congress has heeded calls to amend the PPP. President Trump signed a bill in June that extended the period businesses had to spend their loans and lowered requirements on payroll spending. Earlier this month, the president also signed a bill to extend the deadline for businesses to apply for loans to August.

Mr. Stringer said Washington must do more.

"Our analysis proves New York City's workers and entrepreneurs have been shortchanged," he said. "The federal government must step up to the plate and help New Yorkers get back on their feet."

Write to Akane Otani at akane.otani@wsj.com