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NEW YORK, May 06, 2021 (GLOBE NEWSWIRE) – Biz2Credit has identified San Jose as the “Best Small Business City in America” based on average annual revenue, credit scores, age of business and the BizAnalyzer score developed by Biz2Credit in the local business climate , including rents, labor costs and tax rates. Biz2Credit examined the financials of 32,000 companies applying for small business loans – including companies applying for PPP loans in 2020.
San Jose ousted San Francisco from the top of the 2019 rankings. The other metropolitan areas in the top ten small business growth in 2020 were: San Diego, Los Angeles, Boston, San Francisco-Oakland, New York, Tampa-St. Petersburg, Seattle and Sacramento. In these top 10 metropolitan areas, the leading industries were: 1) professional, scientific and technical services, 2) retail, and 3) other services (other than public administration). Although the cities in the center of these metropolitan areas receive the greatest recognition, Biz2Credit’s study measures metropolitan areas based on Census Bureau tracts, which cover a much wider range of businesses in an area than just those in metropolitan areas.
Overall, the average annual revenue for small businesses decreased to $ 689,000 in 2020 from $ 771,000 in 2019, a decrease of 10.6%. This reflects the direct impact of the coronavirus economic toll on small businesses, many of which have had to close due to measures taken to contain the pandemic.
Somewhat surprisingly, the average business owner credit scores rose 3.4% from 597 in 2019 to 617 in 2020. In fact, consumer credit scores have risen across the board due to the much higher savings rate due to pandemic closings. Based on Biz2Credit’s findings, this also applies to business owners who may have been able to save on rent or other outstanding debt during government-mandated closure periods.
“The heavy reliance on credit scores is a flawed predictor of business performance, but many lenders use it as a major factor in business credit decisions,” said Arora. “There should be a wider range of factors involved in making smart credit decisions, especially when serving the smallest of small businesses.”
Although real estate experts say suburban markets are booming because city dwellers want to escape the population density of urban areas and work from home, new research shows that strong economic foundations in big cities keep them alive and attractive to small businesses. A major hub for the tech industry, San Jose, CA has benefited from and sustained a resilient economy for small businesses despite the pandemic.
“The technology industry in Silicon Valley continues to thrive and San Jose is at the center,” said Rohit Arora, CEO of Biz2Credit, a leading small business finance expert who oversaw the research. “Miami with its diverse economy remains high. Just two years ago it was the number one small town in the country and is still at the top of the list. It also benefited from being in a state where coronavirus mitigation restrictions were less stringent on business. “
For this analysis, Biz2Credit defined “small businesses” as those with fewer than 250 employees or annual sales of less than $ 10 million. The top 25 cities for small businesses in 2020 (with 2019 ranking in brackets) are:
2020 rank city (Rank 2019)
- San Jose, CA (4)
- Miami-Fort Lauderdale, FL (3)
- San Diego, CA (6)
- Los Angeles, CA (5)
- Boston, MA (8)
- San Francisco-Oakland, California (1)
- New York, NY (2)
- Tampa-St. Petersburg, FL (unrated)
- Seattle, WA (9)
- Sacramento, CA (21)
- Orlando, FL (unrated)
- Washington, DC (7)
- Baltimore, MD (10)
- Denver, CO (not classified)
- Raleigh, NC (22)
- Portland, OR (13)
- Philadelphia, PA (18)
- St. Louis, MO (unrated)
- Charlotte, NC (20)
- Chicago, IL (14)
- Riverside, CA (12)
- Minneapolis-St. Paul (25)
- Detroit, MI (11)
- San Antonio, TX (unrated)
- Phoenix, AZ (16)
Tampa-St. Pete, Orlando, Denver, St. Louis, and San Antonio were previously unrated in the 2019 study. Places that were on the 2019 Biz2Credit list but removed from the 2020 list this year were: Austin (15), Milwaukee (17), Cincinnati (19), Pittsburgh (23), and Atlanta (24) .
Small businesses in technology centers are booming. The top 10 subway areas of Annual sales*
|1.||San Jose, California:||$ 1,280,602|
|2.||Miami-Ft. Lauderdale:||$ 1,056,919|
|3.||New York, NY:||$ 1,035,781|
|4th||Seattle, WA:||$ 1,022,581|
|5.||San Diego, CA:||$ 1,019,886|
|6th||Los Angeles, California:||$ 961,298|
|7th||San Francisco-Oakland:||$ 882,112|
|8th.||Tampa-St. Pete, FL:||$ 844,073|
|9.||Portland, OR:||$ 832,234|
|10.||Washington, DC:||$ 795,106|
* Average annual sales measured in 2020 “Many of these companies have no problem allowing their employees to work from home, which has been shown to increase productivity,” said Arora. “Places like Las Vegas, which thrive on tourism and related industries, suffered badly from the pandemic in 2020.”
If sorted by Age of business In months, cities in the Midwest and South had the youngest median age, an indication of startup activity and growth. Indianapolis has become a logistics hub, while the growth of new businesses in Phoenix, Dallas, Houston and Orlando is an indication of the population trend as cities in warmer, business-friendly states have become increasingly popular places to live.
The top 10 cities with the youngest companies (in months) were:
|3.||Dallas-Ft. Worth, TX||63|
|5.||St. Louis, MO||64|
“With the exception of Indianapolis, which is a major logistics center, the start-up activity has been in places with warm weather such as Phoenix, Dallas-Ft. Worth and Houston, ”said Arora.
If sorted by Credit scoreTech hubs like San Jose, San Francisco, New York, and Boston had the highest numbers.
|1.||San Jose, California:||650|
|2.||San Francisco Oakland||641|
|4th||New York, NY:||638|
|7th||San Diego, CA:||635|
|10.||Tampa-St. Pete, FL:||629|
“Credit scores tend to be better in areas with high annual sales,” said Arora.
About the Biz2Credit study, Best Small Business Cities in AmericaBiz2Credit analyzed 32,000 companies across the country with fewer than 250 employees and annual sales of less than $ 10 million that had been operating for more than a year.
About Biz2CreditBiz2Credit was founded in 2007 and has provided more than $ 3 billion in small business funding. The company is expanding its industry-leading technology to include customized digital platform solutions for banks and other financial institutions, investors and service providers. Visit www.biz2credit.com or Twitter @ Biz2Credit, Facebook and LinkedIn.
Media contact: John Mooney, (908) 720-6057, [email protected]