Securing a business loan is perhaps one of the most stressful moments of time for entrepreneurs throughout America, regardless of the region. However, a recent study conducted by Biz2Credit.com has identified New Jersey as the top state for loan approval rates, according to a new study of more than 50,000 loan applications nationwide over the last 12 months.
New Jersey-based entrepreneurs had nearly one-quarter of their loan requests (23.4%) approved and handily paced the Top 10 in the study with the neighboring State of New York placing second as 19 percent of entrepreneurs’ loan requests in “The Empire State” were approved.
Business owners in “The Garden State” have the unique combination of high average annual revenues and credit scores with a close proximity to two of America’s biggest cities. Although the state is sandwiched 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.
The high operating costs of running a business in New York City, which had the lion’s share of loan requests on our platform, had an adverse effect on entrepreneurs seeking funding. Businesses in New York City, however, typically have higher revenues, credit scores and are in business longer, which bodes well during the application process.
The Top 10 States for Loan Approval Rates in America, according to Biz2Credit are:
- New Jersey (23.4%)
- New York (19%)
- Illinois (15%)
- California (14.2%)
- Pennsylvania (12.9%)
- Florida (11.1%)
- Georgia (10.2%)
- Texas (10%)
- Ohio (8.8%)
- North Carolina (7.9%)
The numbers show that even in the top state, the majority of applications are rejected. Fortunately, there are a number of ways entrepreneurs can improve their chances of securing funding. Following these tips will help any small business owner increase his or her odds of getting financing from lenders.
Build Your Credit Score
Many banks, especially the big players, will automatically disqualify a small business loan request if your credit score does not meet the benchmark 600 number. This means that entrepreneurs will have to opt for other options. Be sure to make payments on time and do what you can to reduce the current balances on any credit cards and other lines of credit. Maxing them out can have an adverse effect on your credit scores. If there are any delinquent accounts, they should be attended to first.
Rohit Arora, CEO of Biz2Credit, is one of the country’s best known experts on small business financing and financial technology (FinTech).