Lendio, a leading small business lending marketplace, has released the results of its latest study listing the best states in the US to start a small business in 2024. Florida emerged as the best state for entrepreneurs, closely followed by Texas and North Carolina.
To determine the rankings, the study analyzed ten key metrics from government and nonprofit organizations as well as Lendio's internal data. These metrics included startup survival rates, access to business financing, favorable tax environments and cost of living, providing a comprehensive view of the business climate in all 50 states.
Top 10 States for Small Businesses
Florida took first place in the rankings, displacing Texas, which led in Lendio's analysis for 2023. 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 unchanged from last year's rankings, there were some notable shifts, such as Florida overtaking Texas.
Challenges in the worst-ranking states
At the other end of the spectrum, Hawaii, New Hampshire and Nebraska were identified as the least favorable states to start a small business. These states performed worse due to limited access to business financing and venture capital, fewer local incentive programs, higher tax rates and higher costs of living, making it harder for small businesses to succeed.
Key findings from the study
Brock Blake, CEO and co-founder of Lendio, emphasized the resilience of small business owners despite the economic challenges of recent years. “Small businesses are an important part of our economy, but they have faced unprecedented challenges over the past five years, from a global pandemic to high interest rates,” Blake said. “Despite these challenges, small business owners continue to fight for their dreams and start new businesses in record numbers. States that create a favorable business environment will benefit from the influx of small businesses that have opened in the past year.”
Top performers in individual key figures
The study also identified states that excelled in certain areas:
- 5-year survival rate: Minnesota
- Approved SBA loans per 100,000 residents: Utah
- Loan offers received via the Lendio marketplace per 100,000 inhabitants: Wyoming
- Venture capital per $1 million GDP: Massachusetts
- Lowest corporate tax rate: Arkansas
- Most business incentives: Maryland
- Largest population increases: Florida
- Mobility of the best-educated workers per 100,000 inhabitants: Colorado
- Lowest housing costs: West Virginia
- Largest personal consumption expenditure: California