Lendio recently revealed the results of a study ranking the best states for small businesses. Florida came in as the number one state to start a business with Texas and North Carolina coming in second and third.
The rankings were based on an analysis of 10 metrics from government and nonprofit sources and Lendio’s internal data including startup survival rates, access to business financing, favorable tax environments, and cost of living.
Colorado, South Carolina, Ohio, Georgia, Massachusetts, Utah, and Oklahoma also made the top 10 list. While the states that made the top 10 stayed the same from Lendio’s 2023 analysis, there were some shifts in the line-up including Florida edging out Texas for the top spot.
Hawaii, New Hampshire, and Nebraska ranked as the bottom three states, due to low business funding and venture capital availability, limited local incentive programs, high tax rates, and high cost of living.
“Small businesses are a critical part of our economy, but they’ve faced unprecedented challenges in the past five years from a global pandemic to high interest rates,” said Brock Blake, CEO and Co-Founder of Lendio. “Despite these challenges, small business owners continue to fight for their dreams and start new businesses in record-breaking numbers. States that create a favorable business environment will benefit from the influx of small businesses opened in the past year.”
States with the highest ranking by individual metrics include:
- 5-year survival rate:Â Minnesota
- SBA loans approved/100KÂ Population:Â Utah
- Loan offers received through Lendio’s marketplace/100K population: Wyoming
- Venture capital/$1 million GDP: Massachusetts
- Lowest corporate tax rate:Â Arkansas
- Most business incentives:Â Maryland
- Greatest population gains:Â Florida
- Most educated workforce mobility/100KÂ population:Â Colorado
- Lowest housing costs:Â West Virginia
- Greatest personal consumption expenditures:Â California
See the full report for a breakdown of each state and the methodology behind the rankings.
