2021 Top Small Business
Industries Report

November 17, 2021

Tech, Finance, Restaurant Businesses Lead the Way in 2021 Top Small Business Industry Lists.

According to the Biz2Credit 2021 Top Small Business Industry Report, the industry that led in the most key categories is Information Technology (IT). IT received the highest average amount of funding, highest average revenue, and the highest average credit score. New Jersey tops the list of states that supported the IT industry in the last year for the second year in a row.

In other key categories, Accommodation and Food Services received the highest approval rate and funded rate. Meanwhile, Retail Trade and Health Care struggled in the COVID-19 affected economy and lag behind in both approval and funding rates this year.

table of content

In an examination of PPP funding trends, the newly-created Biz2Credit Small Business Recovery Ranking found that businesses in the Financial Services industry (e.g. insurance agents, investment advisors, and financial planners) recovered the fastest from the COVID-19 pandemic. The ranking is a proprietary measure of demand for financing and an industry’s need for government-provided relief.

The Top Small Business Industries For 2021

introduction and background

In an examination of the financial opportunity available to small businesses in 2020, Biz2Credit research provides a window into the performance of various types of U.S. small businesses in response to the unprecedented COVID-19 global pandemic. Small businesses across industries were negatively affected by the effects of the pandemic, but the research shows that some industries fared better than others.

Patterns in financing applications that were seen in prior years surprisingly continued for multiple industries in 2020, including for Accommodation & Food Service, where restaurants and hotels make up the majority, as application approval rates for small business loans and financing remained constant compared to 2019 and 2018. Restaurants had the highest approval rate compared to any other industry (51%).

The pattern also continued in the Information Technology industry, as IT companies showed the highest overall performance across key dimensions of small business financial health such as revenue and the credit score of the business owner.

Key Findings: Business Performance Measures

Business Performance Measures

Industries that had a high demand for credit, but low levels of distress were Finance and Insurance, Retail, Real Estate, and Wholesale Trade, and Manufacturing.

Business Performance Measures

The industry with the highest approval rates and funding rates was Accommodation and Food Service followed by Retail.

Business Performance Measures

The industry with the highest average funded amount was Information Technology at $320,145.

Business Performance Measures

The industry with the highest average revenue and the highest owner’s credit score was also Information Technology.

Business Performance Measures

The industry with the youngest businesses which corresponds to the highest number of recent startups was Transportation and Warehousing.

In this report, we have quantified what we knew anecdotally about the state of small businesses in this country. Financial and realty businesses did exceptionally well at recovering from the pandemic. As the pandemic raged, Information Technology businesses boomed, seeing their average revenue and owners’ credit scores rise above other businesses. Meanwhile, the rise of startups in the Transportation industry shows that American entrepreneurs have responded to the logistical challenges of ecommerce and pandemic-era travel shocks with a new wave of ventures.

Insight from Biz2Credit CEO, Rohit Arora

Top Industries For 2021

Approval and Funded Rates:

Accommodation and Food Services had the highest average approval rate for all financing applications at 57% and also had the highest average funded rate amoung businesses at 26% of applications being funded. Close behind were Retail Trade (55% and 26%) and Health Care (54% and 23%).

Accommodation and Food Services

Approval Rate
Funded Rate

Age of Business (months):

Transportation and Warehousing had the youngest businesses with an average age of just 54 months (4.5 years)

Health Care & Social Assistance had the oldest businesses with an average age of 91 months (7.6 years)

and Warehousing

54 mo.
Youngest Industry

Health Care & Social

91 mo.
Oldest Industry

Industry Highlights By Funding

  • The industry with the highest total volume of funding in 2020 was the Information Technology industry which soaked up 18% of all funding issued across the entire country.
  • The next highest funded industries across the country were Accommodation and Food Services (15.3%) and Health Care and Social Assistance (8.2%).
  • New Jersey was the state with the highest funding concentration in the IT industry in 2020.
    A massive 63.2% of funded dollars in New Jersey went to IT companies.

Information Technology

of all Small
* Measured in 2020 funding amount across all industries

New Jersey Allocation % to Industries

new jersey allocation

Industry Highlights by Credit Score

  • The industry with the highest average credit score: Information Technology at 636.
  • The next highest FICO scores were in Real Estate (633), Finance and Insurance (624), Professional and Technical (623), and Health Care (619).
industry highlight by credit score

Information Technology

Average FICO

Note: Calculation of owner FICO scores is taken for all financing applications irrespective of approval or funding status.

Industry Highlights by Credit Score

  • The industry with the highest average credit score: Information Technology at 636.
  • The next highest FICO scores were in Real Estate (633), Finance and Insurance (624), Professional and Technical (623), and Health Care (619).
industries credit score for 2021

Industry Highlights by Average Revenue

  • The industry with the highest average revenue in 2020 was Information Technology with an average revenue of over $1.5 million ($1,518,640).
  • This is followed by Wholesale Trade ($1.3M), Manufacturing ($1.1M), Retail Trade ($750K), Accommodation and Food Services ($626K), and Health Care and Social Assistance ($612K).
industry highlight

Note: This data represents averages based on all completed financing applications covered in the report.

Annual Trends among Top Industries for 2021

The top industries this year saw significant changes from a year ago as the COVID-19 pandemic accelerated economic changes that were underway and further entrenched certain trends.

  • Information Technology had the highest average funded amount and the highest FICO scores in 2020. Funded amounts increased from $102,029 to $320,145 (growth of 214%) and FICO scores rose 3 points from 633 to 636 in the IT industry during the pandemic.
  • Accommodation and Food companies saw a growth in the average Approval and Funded Rates for their financing requests during 2020. Approval rates in the industry rose from 51% to 56% and Funding Rates also ticked higher to 26%.
  • Financial Services companies proved the most resilient in recovering from the effects of the pandemic. Growth capital applications from these companies represented a higher percentage of their total financing requests compared to the height of the pndemic.
annual top industries trend

State-wise funding levels vary widely by Industry

  • Six industries represented the highest volume of small business financial activity in 2020. These industries are Information Technology, Wholesale Trade, Manufacturing, Retail Trade, Accommodation and Food Services, and Health Care and Social Assistance.
  • States where these industries were strongest in terms of average funding amounts varied, but especially states in the Northeast, Pacific Northwest and the South were among those States where these six active industries experienced the highest average volume of funding compared to other industries.
state wise funding levels

About the Biz2Credit Top Small Business Industries Study

Biz2Credit, a leading online funding provider to small businesses, analyzed the financial performance of over 200,000 companies that submitted funding requests through the company’s online funding platform. The objective of the study is to identify the top industries for small businesses during the preceding year and to measure the performance of businesses based on their industry affiliation.

All companies included in the Biz2Credit survey have less than 250 employees and less than $10 million in annual revenues. The report covered small businesses across the country, from start-ups to established companies. The company also analyzed lending data from the Paycheck Protection Program (PPP) based on the Small Business Administration’s database.