The real estate mantra — location, location, location — is just as relevant for small-business owners. Where you decide to set up shop can be critical to your long-term success.
If you can choose where to start your small business, which regions should you consider? To determine the most entrepreneurial states, NerdWallet analyzed information from the U.S. Census Bureau’s County Business Patterns and data on Small Business Administration loans.
In addition to location, being able to finance your business, whether through an SBA loan, venture capital or online lenders, is critical to getting your idea off the ground. Each of our top 10 states is a leader in financing for entrepreneurs.
Key takeaways
Follow the money. Residents in Utah and Massachusetts have some of the highest rates of receiving SBA-guaranteed loans, while businesses in Connecticut and Georgia are approved for some of the largest SBA loans on average.
Big ventures. Eight of the top 10 states are among the top 10 recipients of venture capital funding per resident.
Mountain West soars. Entrepreneurs in Utah received 57 SBA loan guarantees per 100,000 residents, the most in the country. Colorado has 2.81 small businesses (defined as less than 50 employees) per 100 residents, one of the highest rates in the U.S.
Coasts dominate. The remaining eight of the top 10 entrepreneurial states are in the nation’s coastal regions. The highest-ranking state that doesn’t border the Atlantic or Pacific oceans (excluding Utah and Colorado) is Texas at No. 14.
Most entrepreneurial states: Where small-business loans rule and startups are aplenty
The map shows the overall score for each state and Washington, D.C., that was used to determine the most entrepreneurial states.
To see detailed data, click on a category above the map and hover over a state.
1. Utah
57.43 SBA loans per 100,000 people (rank: No. 1)
4.3% small-business growth from 2010 to 2013 (rank: No. 3)
2. Colorado
$17.97 million in venture capital funding per 100,000 people (rank: No. 7)
2.81 small businesses per 100 people (rank: No. 8)
3. California
$84.23 million in venture capital funding per 100,000 people (rank: No. 1)
2.6% small-business growth from 2010 to 2013 (rank: No. 5)
4. Connecticut
$523,091 average SBA loan in 2014-2015 (rank: No. 2)
94.4% average SBA loan size growth from 2012 to 2015 (rank: No. 5)
5. New York
$29.99 million in venture capital funding per 100,000 people (rank: No. 5)
2.4% small-business growth from 2010 to 2013 (rank: No. 7)
6. Washington
$18.98 million in venture capital funding per 100,000 people (rank: No. 6)
95.5% of all businesses are small businesses (rank: No. 12)
7. Florida
3.7% small-business growth from 2010 to 2013 (rank: No. 4)
56.4% growth in SBA loans per 100,000 people from 2012 to 2015 (rank: No. 8)
8. Washington, D.C.
$33.82 million in venture capital funding per 100,000 people (rank: No. 3)
3.11 small businesses per 100 people (rank: No. 5)
9. Georgia
$523,949 average SBA loan in 2014-2015 (rank: No. 1)
60.6% growth in number of SBA loans from 2012 to 2015 (rank: No. 5)
10. Massachusetts
$78.71 million venture capital funding per 100,000 people (rank: No. 2)
47.74 SBA loans per 100,000 people in 2014-2015 (rank: No. 7)
Looking for financing to start or grow your small business? Compare your options for small-business loans here:
Compare business loansMost entrepreneurial states data
Scroll through the table to see the data for all 50 states and Washington, D.C.
| State | SBA loans per 100,000 people in 2015 | Growth of SBA loans per 100,000 people 2012-2015 | Average SBA loan size 2014-2015 |
Venture capital funding per 100,000 people 2014- 2015 |
Small businesses per 100 people in 2013 |
Small-business growth 2010-2013 |
Score |
|---|---|---|---|---|---|---|---|
| Utah | 57.43 | 0.70% | $278,754 | $33,747,855 | 2.36 | 4.30% | 71.68 |
| Colorado | 43.45 | 50.20% | $271,620 | $17,970,842 | 2.81 | 1.60% | 66.18 |
| California | 32.19 | 60.60% | $410,345 | $84,233,988 | 2.16 | 2.60% | 63.76 |
| Connecticut | 23.77 | 15.20% | $523,091 | $9,852,508 | 2.32 | -1.10% | 61.57 |
| New York | 25.43 | 11.40% | $383,021 | $29,987,038 | 2.58 | 2.40% | 60.63 |
| Washington | 32.47 | 45.30% | $308,419 | $18,979,397 | 2.42 | 0.30% | 59.39 |
| Florida | 22.3 | 56.40% | $360,750 | $4,309,211 | 2.49 | 3.70% | 59.35 |
| Washington, D.C. | 12.45 | -21.20% | $369,325 | $33,824,050 | 3.11 | 1.60% | 57.42 |
| Georgia | 24.62 | 60.60% | $523,949 | $6,279,122 | 2.06 | -0.10% | 57.35 |
| Massachusetts | 47.74 | 50.30% | $157,694 | $78,705,379 | 2.42 | 1.30% | 56.36 |
| Maine | 44.88 | 67.00% | $182,232 | $1,489,600 | 2.91 | -0.90% | 54.07 |
| Alaska | 24.98 | 18.70% | $503,067 | $0 | 2.67 | 2.50% | 53.83 |
| Oregon | 31.16 | 45.40% | $281,557 | $3,901,982 | 2.65 | 0.90% | 53.62 |
| Texas | 25.16 | 41.90% | $390,784 | $5,390,080 | 1.94 | 4.40% | 53.43 |
| Delaware | 26.19 | 35.80% | $401,370 | $5,311,998 | 2.48 | -0.80% | 52.95 |
| Vermont | 55.22 | -32.30% | $154,963 | $2,753,279 | 3.25 | -1.70% | 52.71 |
| Virginia | 14.6 | 24.20% | $405,753 | $5,961,662 | 2.21 | 0.10% | 51.97 |
| New Hampshire | 52.83 | 0.80% | $137,281 | $13,729,749 | 2.67 | -0.90% | 51.97 |
| Wyoming | 25.34 | 16.00% | $268,945 | $0 | 3.43 | 1.80% | 51.72 |
| Montana | 38 | 5.30% | $242,589 | $0 | 3.49 | 1.40% | 51.09 |
| Idaho | 55.55 | 44.90% | $207,020 | $2,936,749 | 2.58 | -1.00% | 50.15 |
| Pennsylvania | 20.77 | 16.30% | $346,413 | $5,921,936 | 2.19 | 0.00% | 49.76 |
| Illinois | 24.49 | 37.40% | $349,119 | $7,397,737 | 2.31 | 0.20% | 48.27 |
| Arkansas | 16.72 | 89.00% | $412,130 | $731,504 | 2.08 | -0.80% | 48.20 |
| North Dakota | 44.36 | -30.00% | $203,464 | $953,370 | 3.15 | 9.80% | 48.20 |
| Minnesota | 44.99 | 24.10% | $258,745 | $5,091,310 | 2.54 | 0.30% | 46.60 |
| Maryland | 18.74 | 31.80% | $367,575 | $7,966,218 | 2.15 | 0.30% | 46.15 |
| New Jersey | 25.35 | 22.40% | $278,351 | $5,623,557 | 2.45 | 0.40% | 45.69 |
| Nevada | 26.87 | 55.10% | $292,637 | $1,021,486 | 2.04 | 1.70% | 43.93 |
| Rhode Island | 48.52 | 37.20% | $149,543 | $7,276,323 | 2.53 | -2.00% | 43.69 |
| South Dakota | 29.65 | -15.40% | $289,188 | $826,560 | 2.95 | 1.40% | 43.48 |
| South Carolina | 12.42 | 35.60% | $507,535 | $993,278 | 2.02 | -0.80% | 42.53 |
| Arizona | 25.79 | 38.40% | $363,086 | $3,791,347 | 1.89 | 0.30% | 42.37 |
| North Carolina | 14.56 | 10.20% | $428,306 | $4,872,914 | 2.1 | -0.20% | 42.33 |
| Nebraska | 31.73 | 15.10% | $183,554 | $5,834,235 | 2.68 | 1.20% | 41.49 |
| Oklahoma | 20.53 | 33.10% | $314,841 | $794,291 | 2.26 | 1.50% | 40.94 |
| Louisiana | 13.03 | 3.20% | $394,420 | $1,036,545 | 2.13 | 0.60% | 40.81 |
| Ohio | 45.78 | 60.20% | $174,123 | $2,504,797 | 2.02 | -1.80% | 38.25 |
| Michigan | 39.51 | 64.90% | $185,119 | $2,072,457 | 2.08 | -1.20% | 38.21 |
| Kansas | 23.11 | 13.20% | $266,723 | $2,816,784 | 2.41 | -0.90% | 37.31 |
| Missouri | 27.21 | 13.00% | $256,498 | $2,155,407 | 2.36 | 0.10% | 37.10 |
| Alabama | 15.38 | 12.60% | $349,951 | $224,647 | 1.91 | -2.00% | 35.80 |
| Tennessee | 12.67 | 54.50% | $413,971 | $2,398,019 | 1.89 | -1.00% | 35.40 |
| Hawaii | 53.96 | 119.40% | $72,465 | $100,383 | 2.12 | -1.40% | 35.31 |
| New Mexico | 19.8 | 26.30% | $259,560 | $3,202,858 | 2 | -1.20% | 34.77 |
| Wisconsin | 39.72 | 20.70% | $249,876 | $1,504,232 | 2.25 | -1.50% | 34.64 |
| Indiana | 28.82 | 32.80% | $263,624 | $1,249,354 | 2.05 | -1.40% | 33.80 |
| Mississippi | 18.97 | 2.00% | $280,949 | $0 | 1.86 | -1.70% | 30.97 |
| Kentucky | 18.51 | 43.40% | $207,202 | $787,908 | 1.94 | -0.40% | 29.41 |
| Iowa | 19.95 | -10.80% | $227,041 | $816,832 | 2.47 | -0.50% | 25.13 |
| West Virginia | 8.54 | -22.40% | $204,114 | $0 | 1.92 | -3.10% | 14.50 |
Methodology
NerdWallet analyzed all 50 states and Washington, D.C. The score for each location was determined by analyzing data from the U.S. Census Bureau, the Small Business Administration and a report by PricewaterhouseCoopers and the National Venture Capital Association. Our analysis examined:
Small business loan environment, which accounts for 75% of the overall score, is based on five metrics from the Small Business Administration (via usaspending.gov) and a report by PricewaterhouseCoopers and the National Venture Capital Association.
- SBA loan guarantees per 100,000 people from August 2014 to July 2015 is 15% of the score. A higher rate contributed to a higher score.
- Growth in SBA loans per 100,000 people from 2012 to 2015 is 15% of the score. A higher rate contributed to a higher score.
- Average SBA loan size from August 2014 to July 2015 is 15% of the score. A higher amount contributed to a higher score.
- Growth in average SBA loan size from 2012 to 2015 is 15% of the score. A higher number contributed to a higher score.
- Venture capital funding per 100,000 people from the third quarter of 2014 to the second quarter of 2015 is 15% of the score. A higher number contributed to a higher score.
Local business economy, which makes up 25% of the overall score, is based on three metrics from the U.S. Census Bureau’s County Business Patterns.
- Small businesses as a percent of all businesses are 5% of the score. A higher percentage contributed to a higher score.
- Small businesses per 100 people are 10% of the score. A higher ratio contributed to a higher score.
- Growth in the number of small businesses from 2012 to 2015 is 10% of the score. A higher rate contributed to a higher score.
Salt Lake City, Utah, image via iStock.
from NerdWallet Credit Card Blog
http://www.nerdwallet.com/blog/small-business/most-entrepreneurial-states-where-small-business-loans-rule-2015/
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