Most Entrepreneurial States: Where Small-Business Loans Rule and Startups Abound
Wednesday, October 14th, 2015
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.
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)
