A recent study from small business loan marketplace Lendio ranked Georgia ninth out of the ten best U.S. states in which to start and grow a small business.
A large portion of the small businesses in Atlanta are Black-owned. Atlanta has the highest rate of Black-owned businesses in the country, according to data provided by Lending Tree. Nearly 8% of businesses in the Atlanta metro area are Black-owned. That percentage is up from 6.7% as reported in the company’s 2022 report.
Using date from the U.S. Census Bureau, Small Business Administration and Department of Labor Statistics, the study analyzed survival rates, corporate income tax rates, loan dollars and consumer spending to find the best states to develop small businesses following the aftermath of the pandemic.
Georgia lands a spot in the top 10 primarily due to the state’s frequent approval of small business loans, with Lendio citing $10.6 million worth of loans granted for every 100,000 residents.
Lendio also considered the general cost of living within states, migration and concentration of educated workers and popularity among citizens from other states when generating its ranking.
Georgia makes Lendio’s list for its reputation as a “hot” market in terms of relocation, with the state seeing a net growth of more than 81,000 new residents over the course of last year alone. The state also offers more incentive programs for small business owners than five other states in Lendio’s top 10 ranking, totaling 47 as of 2022, per the Council for Community and Economic Research’s State Business Incentives Database.
Georgia avoids placing any higher on Lendio’s list because it boasts the second-highest increase in cost of living, and a relatively low 5-year survival rate (49.6%) when compared to its higher-ranking competitors. Georgia also possesses a higher corporate income tax percentage of 5.75% in comparison to other states in Lendio’s top 10, with a majority of these states offering tax rates below 5%.
Georgia is one of four states in the American southeast to find a spot on Lendio’s ranking, bested by North Carolina, South Carolina and Florida. Lendio named Texas the best state to start a small business due to the state’s high loan approval rating, mobility of educated workers, absence of corporate income tax and its status as a popular relocation destination.