According to a new report by Biz2Credit, New Jersey and New York are ranked the top 2 States for the approval of small business loans. Biz2Credit which identifies itself as a leading online lending marketplace for small business owners analyzed over 50,000 loans over a 12 month period. During that period, 23.4 percent of loans in New Jersey were approved.
Rohit Arora, CEO of Biz2Credit attributes New Jersey’s top spot on several factors. He states “New Jersey business owners have the unique combination of high average annual revenues and credit scores with a close proximity to two of America’s biggest cities. Despite being sandwiched in between New York and Philadelphia, New Jersey-based businesses have much lower overhead costs while still enjoying the benefits of a high volumes of traffic.”
New York came in second in the report with loan approvals of 19 percent. “The high operating costs of running a business in New York City, which had the lion’s share of loan requests on our platform, had an adverse effect on entrepreneurs seeking funding. Businesses in New York City, however, typically have higher revenues, credit scores and are in business longer, which bodes well during the application process.”
The Top 10 States by loan approvals are the following according to the report:
1. New Jersey (23.4%)
2. New York (19%)
3. Illinois (15%)
4. California (14.2%)
5. Pennsylvania (12.9%)
6. Florida (11.1%)
7. Georgia (10.2%)
8. Texas (10%)
9. Ohio (8.8%)
10. North Carolina (7.9%)
For small businesses seeking financing and are not aware of where to seek information there are several options. Here are the most popular ways to get financing for your small business:
(1) S.B.A. Loans- The U.S. Small Business Administration
Government loans are generally offered through banks and credit unions that work with the Small Business Administration (SBA). The SBA is a U.S. government entity, with the motive of providing economic support for small businesses and entrepreneurs. The loans can be applied to a number of uses, such as:
Purchase of new equipment, machinery, parts, supplies and ancillary items
Financing leasehold improvements
Commercial mortgage on buildings
Refinance existing debt
Establishing a line of credit
(2) Non bank entities- Known more commonly as alternative financing, they provide financing that do not have the stricter loan requirements than a traditional bank. The benefits of this type of financing is that you have a higher chance of approval, however the terms of the loan such as interest rates and overall payments terms will be higher than a bank loan. More of these companies have been popping up and there are many opportunities to obtain financing through this avenue. Kabbage which extends businesses a line of credit have spent millions of dollars in advertising to bring awareness of their product.
(3) Crowdfunding- Small business in this instance gives the principals of a company the opportunity to raise capital through the collective effort of a large group of individuals, as opposed to a single entity.
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