The TPS74901 is designed to have excellent transient response for most applications with a small amount of output capacitance. In some cases, the transient response can be limited by the transient response of the input supply. This limitation is especially true in applications where the difference between the input and output is less than 300mV. In this case, adding additional input capacitance improves the transient response much more than just adding additional output capacitance otherwise does. With a solid input supply, adding additional output capacitance reduces undershoot and overshoot during a transient event; see Figure 5-36 in the Typical Characteristics section. Because the TPS74901 is stable with output capacitors as low as 2.2µF, many applications can need very little capacitance at the LDO output. For these applications, local bypass capacitance for the powered device can be sufficient to meet the transient requirements of the application. This design reduces the total solution cost by avoiding the need to use expensive high-value capacitors at the LDO output.