Biz2Credit Identifies New York as 2017's Best Small Business City
Analysis Examined Annual Revenue, Credit Scores and Other Factors
NEW YORK, NY, May 2, 2017 - Biz2Credit has identified New York as the Best Small Business City in America, based on a weighted average that includes annual revenue, credit score, age of business (in months), and a BizAnalyzer score that factors in cash flow, debt-to-income ratio, taxes and other data. In its computation, Biz2Credit examined the financials of nearly 30,000 companies that applied for small business funding in 2016.
"There is no doubt that New York is the Big Apple for small business," explained Biz2Credit CEO Rohit Arora, one of the nation's leading experts in small business finance, who oversaw the research. "Companies in the New York metropolitan area had the highest average revenue ($979,674), were the longest established (76 months), and business owners had the highest personal credit scores (646). The city's growth has been fueled by the booming real estate market and construction industry, banking and finance, and New York's booming technology sector."
New York businesses led the three key categories of financial metrics in the study to be named America's Top Small Business City in 2017: annual revenue, credit score and Biz2Credit's proprietary BizAnalyzer score, which takes into account local economic factors, including the cost of doing business and tax rate.
The Miami-Fort Lauderdale metro area ranked No. 2 in Biz2Credit's annual study.
"Miami has always been a hub for Latin American operations due to its proximity," suggests Arora. "Latinos have accounted for more than half of the total U.S. population growth over the last 15 years. Immigrants continue to move in and start businesses. Additionally, there is a real estate and construction boom in South Florida. The weather is nice, and Miami is a bit less expensive than New York or Northern California in terms of cost of living."
With its thriving tech sector and access to universities and highly skilled workers, Austin, Texas, jumped to No. 3. Meanwhile, San Jose dropped from the top spot in 2016 to No. 4 this year.
"Technology companies in Silicon Valley are still thriving, but it's the supplementary companies that are faced with challenges of growing," explained Arora. "Lacking that economic balance in the area has prevented San Jose from reigning as the leader in top small business cities this year."
Los Angeles rounded out the Top Five. Meanwhile, other California cities such as San Francisco dropped to No. 8 on the list. Riverside-San Bernardino, CA, which was the top metro area in Biz2Credit's 2015 study and No. 6 last year, rounded out the study's Top 10.
"Retail vacancies in San Francisco and its surrounding areas squeezed the margins of businesses," Arora said.
Indianapolis (No. 9) and Detroit (No. 15) were two of the regions that made the biggest improvements in a year-to-year comparison.
"Indianapolis has grown as an e-commerce and logistics hub and is a lower cost city than other places in the Midwest," said Arora. "Additionally, the city is a major part of the sports landscape. These factors combine to make it an attractive place to live and a destination city for immigrants who bring an entrepreneurial spirit with them."
Detroit has come a long way since the auto industry bailout, and the once-thriving auto manufacturing mecca is booming again. The convergence of information technology and automobiles has rejuvenated the demand in the region and this has translated into much-needed growth for a city that filed for Chapter 9 bankruptcy less than four years ago.
"Technology is transforming the auto industry more than any other industry. U.S. auto makers had a banner year in 2016, and the companies that service the industry also did very well," Arora explained. "Cars are becoming increasingly sophisticated, and buyers want all the latest features."
For this analysis, Biz2Credit defined "small businesses" as companies having fewer than 250 employees or less than $10 million in annual revenues. The Top 25 Cities for Small Business in 2017 are:
- 1. New York, NY
2. Miami-Fort Lauderdale, FL 3. Austin, TX
4. San Jose, CA
5. Los Angeles, CA
6. Seattle, WA
7. Phoenix, AZ
8. San Francisco, CA
9. Indianapolis, IN
10. Riverside-San Bernardino, CA
11. Houston, TX
12. Baltimore, MD
13. Dallas-Fort Worth, TX
14. San Diego, CA
15. Detroit, MI
16. Washington DC
17. Denver, CO
18. Sacramento, CA
19. Chicago, IL
20. Atlanta, GA
21. San Antonio, TX
22. Charlotte, NC
23. Las Vegas, NV
24. Philadelphia, PA
25. Virginia Beach, VA
"Businesses in New York significantly outpaced companies based in other cities in annual revenues," said Arora, whose firm is based in Manhattan. "Tourism, food & hospitality, real estate and construction are quite strong. Additionally, the tech industry is booming, particularly ecommerce and fashion-focused technology. New York benefits from an educated workforce that attracts young professionals from top schools in the U.S. and immigrants from all over the globe."
The Top 10 metro areas by Annual Revenue
- 1. New York, NY ($979,674)
2. Miami-Fort Lauderdale, FL ($800,024)
3. Austin, TX ($750,023)
4. San Jose, CA ($640,334)
5. Seattle, WA ($632,114)
6. Los Angeles, CA ($542,712)
7. Washington, DC ($542,674)
8. San Diego, CA ($527,957)
9. Dallas-Fort Worth, TX ($513,533)
10. San Francisco, CA ($511,991)
When sorted by Age of Business (in months), Las Vegas had the youngest average age of business, which indicates startup growth.
- 1. Las Vegas, NV (44)
2. San Antonio, TX (44)
3. Virginia Beach, VA (46)
4. Denver, CO (47)
5. Atlanta, GA (49)
6. Philadelphia, PA (50)
7. Austin, TX (50)
8. Riverside-San Bernardino, CA (51)
9. Baltimore, MD (52)
10. Sacramento, CA (52)
"Entrepreneurs are taking advantage of the stream of visitors that continue to flock to Las Vegas and its low costs of living make it an attractive location to start a business," says Arora. "Nevada is one of seven states in America that does not collect an income tax and this stimulates companies to hire more workers and generate more revenue to fuel the economy."
"The cost of living in Las Vegas is much less than it is elsewhere in the U.S., and immigrants from Latin America and Asia are moving in and starting businesses," Arora added.
When sorted by Credit Score, New York, again was the leader. Rounding out the Top 10 were San Jose, San Francisco, Miami-Fort Lauderdale, Riverside-San Bernardino, Los Angeles, Indianapolis, Seattle, Austin and Houston.
- 1. New York, NY (646)
2. San Jose, CA (644)
3. San Francisco, CA (640)
4. Miami-Fort Lauderdale, FL (640)
5. Riverside-San Bernardino, CA (627)
6. Los Angeles, CA (625)
7. Indianapolis, IN (622)
8. Seattle, WA (622)
9. Austin, TX (621)
10. Houston, TX (616)
"Businesses in the New York metro area were more established than those throughout the country and typically higher credit scores comes with the territory," Arora said. "There is also a correlation between higher credit scores and businesses with better longevity. Many of the cities in the Top 10 were represented by longer operating businesses."
About the Biz2Credit Best Small Business Cities in America Study
Biz2Credit analyzed nearly 30,000 businesses with less than 250 employees and less than $10 million in annual revenues from across the country that have been in operation for more than one year.
Founded in 2007, Biz2Credit has arranged more than $1.6 billion in small business financing and was recently named to Crain's New York's Fast 50 and the top 150 of fast-growing companies on Deloitte's 2016 Technology Fast 500. Biz2Credit is expanding its industry-leading technology in custom digital platform solutions for leading banks and other financial institutions, investors and service providers in the US and abroad. Please visit www.biz2credit.com, and follow us on Twitter: @Biz2Credit, Facebook: www.facebook.com/biz2credit and LinkedIn: https://www.linkedin.com/company/biz2credit-llc.