When we embarked upon this study, we expected cities such as New York City, Boston, and Philadelphia, which both have well deserved reputations for business innovation, to be atop the list.
New York, NY (PRWEB) May 01, 2013
Biz2Credit has identified the Fastest Growing Small Business Cities in America, based on the following criteria:
1. Average Annual Revenue: Riverside-San Bernardino, CA ($508,538)
2. Average Number of Employees: Houston (7.1)
3. Youngest Average Age of Business (in Months): Houston (34.0)
4. Highest Average Credit Score: San Francisco-Oakland BayArea (643)
"Houston has had sustained growth, thanks to an influx of immigrants who have started their own businesses. The city's small businesses have created the highest average number of jobs (7.1) and are the youngest in age (34 months), meaning that these are new businesses that have started up only in the past three years," said Biz2Credit CEO, Rohit Arora, one of the nation's leading experts in small business loans, who oversaw the research. "If local governments want to promote small businesses, they cannot handcuff entrepreneurs with fees and costs."
For this analysis, Biz2Credit defined "small businesses" as companies having fewer than 250 employees or less than $10 million in annual revenues.
"When we embarked upon this study, we expected cities such as New York City, Boston, and Philadelphia, which both have well deserved reputations for business innovation, to be atop the list," Arora added. "However, the costs of doing business are much greater in big cities along the east coast. In other sections of the country, the cost of living is much cheaper. Technology levels the playing field."
Arora points out that New York's state and local tax burden, government fees, cost of living (property taxes have risen about 30% in past few years), the prevalence of unions, and high insurance costs make it unattractive for knowledge-based businesses, which don't have to have a presence in the Big Apple to be successful.
"While sales in New York are higher than in other places, the operating costs are also higher. Thus, revenues are up, but profits are down," Arora said. "These realities do not bode well for small business growth."
Drivers of small business growth include the arrival of large numbers of Latinos and South Asian immigrants, who are starting companies in metropolitan areas in all sections of the country, including cities in southern California, Texas, and Florida.
The Top 10 metro areas with the highest small business loan application growth (2011-12) by Annual Revenue were: Riverside-San Bernardino, CA, New York City, Los Angeles, Boston, Houston, Washington, DC, Jacksonville, Detroit, Cincinnati, and Cleveland.
(For the complete Top 25 ranking by Average Annual Revenue, click here: http://bit.ly/11F6xOr.)
Small businesses in Houston had the highest average number of employees. This measurement is significant, as smaller companies have created the lion's share of new jobs during the past decade.
"Houston was well ahead of the other cities in the average number of employees at small companies," Arora explained.
The Top 10 metro areas with the highest small business loan application growth (2011-12) sorted by the Number of Employees were: Houston, Miami-Fort Lauderdale, Los Angeles, Washington, DC, Phoenix, Charlotte, Philadelphia, Chicago, Atlanta, and Cincinnati.
(For the complete Top 25 ranking by Number of Employees, click here: http://bit.ly/11F6xOr.)
When sorted by Age of Business (in months), Houston was again the leader.
"The small number of months in business indicates more startups in the area," Arora explained. "Cities such as New York, Detroit, Los Angeles, Cincinnati, and Boston tend to have older, more established companies, which raise the average."
The Top 10 metro areas with the highest small business loan application growth (2011-12) sorted by Age of Business were: Houston, Tampa-St. Pete, Denver, Seattle, Dallas-Fort Worth, Orlando, Atlanta, Charlotte, St. Louis, and San Francisco-Oakland.
(For the complete Top 25 ranking by youngest Age of Business, click here: http://bit.ly/11F6xOr.)
When sorted by Average Credit Score, the San Francisco-Oakland Bay Area was the leader.
"Small businesses in cities such as San Francisco, New York, Boston, and Los Angeles tended to have higher credit scores. Many of these cities are tech hubs with small, nimble and profitable small businesses. They are also areas with a long history of innovation and success, and thus achieve higher credit scores," Arora said.
The Top 10 metro areas with highest small business loan application growth 2011-2012 sorted by highest Credit Score were: San Francisco-Oakland, New York City, Boston, Los Angeles, Seattle, Chicago, San Diego, Philadelphia, Baltimore, and Washington, DC.
(For the complete Top 25 ranking by Credit Score, click here: http://bit.ly/11F6xOr.)
About the Biz2Credit Fastest Growing Small Business Cities Study
Biz2Credit analyzed 15,000 businesses with less than 250 employees and less than $10 million in annual revenues from across the country that have been in operation for more than 1 year.
Founded in 2007, Biz2Credit Business Loans is a leading credit marketplace connecting small- and medium-sized businesses with lenders, service providers, and complementary business tools. Using the latest technology, Biz2Credit matches borrowers to financial institutions based on each business’s unique profile -- completed in less than four minutes -- in a safe, efficient, price-transparent environment. Biz2Credit’s network consists of 1.6 million users, 1,100+ lenders, credit rating agencies such as D&B and Equifax, and small business service providers including CPAs and lawyers.
Having arranged $850+ million in funding throughout the U.S., Biz2Credit is widely recognized as the #1 online credit resource for small business loans, lines of credit, equipment loans, working capital and other funding options.