A recent survey identified New Jersey as the state with the highest approval rate for small business loan applications. The ranking was based on an analysis of 50,000+ loan applications over the past 12 months made on Biz2Credit.com, an online lending marketplace for small business owners. In New Jersey, business loan requests were approved for 23.4 percent of the applications.
How did New Jersey applicants do so well?
“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,” said Biz2Credit CEO Rohit Arora, who oversaw the research. “Despite being sandwiched in between New York and Philadelphia, New Jersey-based businesses have much lower overhead costs while still enjoying the benefits of high volumes of traffic.”
Meanwhile, New York-based companies placed second in the study with approvals on just under one-fifth (19 percent) of loan requests. “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 loans, “according to Arora. “Businesses in New York City, however, typically have higher revenues, credit scores and are in business longer, which bodes well during the application process.”
One of the biggest surprises in the analysis was Illinois – a state that is potentially on the brink of bankruptcy – which ranked third for highest loan approval rates. “Despite recent reports of Illinois having the lowest credit rating of any state, the Midwestern hub was very welcoming for business owners seeking financing,” added Arora. “It’s booming technology sector, which does not have close ties to the state, is driving the economy.”
Top 10 States by Loan Approval Rates
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%)