If you’re based in New Jersey, you’re most likely to be approved for a small business loan. That’s according to a new report by Biz2Credit, which has identified New Jersey as the top state for small business loan approval rates.
The report found nearly one-quarter (23.4 percent) of funding requests made by New Jersey-based businesses were approved by lenders.
New York-based companies came in second in the report with approvals on just under one-fifth (19 percent) of loan requests.
The study examined over 50,000 loan applications in the last 12 months.
Why New Jersey-based Businesses Have an Easier Time Getting Loan Approvals
Biz2Credit CEO Rohit Arora, who oversaw the research, explained, “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.”
Illinois Comes as a Surprise
Surprisingly Illinois, a state potentially on the verge of bankruptcy, 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,” said Arora. “It’s booming technology sector, which does not have close ties to the state, is driving the economy.”
Doing Business Still a Challenge in the Garden State
Although it’s easier to secure funds for your small business if you are in New Jersey, doing business is still quite difficult.
A recent study conducted by WalletHub found New Jersey to be the state with the worst business environment for startups.
10 Best States for Getting a Small Business Loan
According to the Biz2Credit report, the top 10 states by loan approval rates are:
- New Jersey (23.4 percent)
- New York (19 percent)
- Illinois (15 percent)
- California (14.2 percent)
- Pennsylvania (12.9 percent)
- Florida (11.1 percent)
- Georgia (10.2 percent)
- Texas (10 percent)
- Ohio (8.8 percent)
- North Carolina (7.9 percent)
Check out this infographic from Biz2Credit highlighting its findings: