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Lendio, a leading marketplace for small business loans, has released the results of its latest study ranking the best states in the U.S. for starting a small business in 2024. Florida emerged as the top state for entrepreneurs, followed closely by Texas and North Carolina.
The study analyzed 10 key metrics, sourced from government and nonprofit organizations as well as Lendio’s internal data, to determine the rankings. These metrics included startup survival rates, access to business financing, favorable tax environments, and cost of living, providing a comprehensive overview of the business climate across all 50 states.
Top 10 States for Small Businesses
Florida claimed the top spot in the rankings, edging out Texas, which was the leader in Lendio’s 2023 analysis. North Carolina secured third place, followed by Colorado, South Carolina, Ohio, Georgia, Massachusetts, Utah, and Oklahoma, rounding out the top 10 states. While the states in the top 10 remained consistent from last year’s rankings, there were some notable shifts, such as Florida surpassing Texas.
Challenges in the Bottom-Ranked States
On the other end of the spectrum, Hawaii, New Hampshire, and Nebraska were identified as the least favorable states for starting a small business. These states ranked lower due to limited access to business funding and venture capital, fewer local incentive programs, higher tax rates, and a higher cost of living, making it more challenging for small businesses to thrive.
Key Insights from the Study
Brock Blake, CEO and Co-Founder of Lendio, highlighted the resilience of small business owners despite the economic challenges of recent years. “Small businesses are a critical part of our economy, but they’ve faced unprecedented challenges in the past five years from a global pandemic to high interest rates,” said Blake. “Despite these challenges, small business owners continue to fight for their dreams and start new businesses in record-breaking numbers. States that create a favorable business environment will benefit from the influx of small businesses opened in the past year.”
Top Performers in Individual Metrics
The study also identified states that excelled in specific metrics:
- 5-Year Survival Rate: Minnesota
- SBA Loans Approved per 100K Population: Utah
- Loan Offers Received through Lendio’s Marketplace per 100K Population: Wyoming
- Venture Capital per $1 Million GDP: Massachusetts
- Lowest Corporate Tax Rate: Arkansas
- Most Business Incentives: Maryland
- Greatest Population Gains: Florida
- Most Educated Workforce Mobility per 100K Population: Colorado
- Lowest Housing Costs: West Virginia
- Greatest Personal Consumption Expenditures: California
