In a recent study, Lendio found that northeastern small business owners lead the nation in loan approval rates. Given their success, a look into why the Northeast is so successful in acquiring capital is warranted. Loan approvals are typically dependent upon three factors: time in business, annual revenue, and credit score. There are other factors that can certainly play a part, but if you have a combination of a good credit score, enough time in business and sustainable revenue, you’ll have a much higher chance of securing the capital to grow your business. Established Businesses Thrive Time in business is an important factor when getting funding, but it’s not necessarily a deal-breaker. It is possible to get startup capital when you’re a young business. That said, in the eyes of a lender, an operation with an established history is deemed much less risky. As a region, the Northeast has one of the oldest and most established economies in the country. When it comes to time in business, northeastern small businesses outrank their peers in other regions. Not only have they been in business two years longer on average, but the individual business owners are also a year older on average. Revving with Revenue Revenue is also an important component in the mix when your business is being evaluated by a lender; they want to see that you’ll have the means to pay back the loan. Even if you’re able to put up collateral, a bank or online lender will still prefer to see stable financial figures. Another high point for businesses in the Northeast is their average revenue. The Lendio study found that compared to businesses in other regions, business owners in the Northeast have higher-than-average annual revenues. While not the highest in the country—businesses in the Pacific and Mountain regions rank higher—the average annual revenue in the Northeast sits comfortably at $816,591, and it’s growing. In Q3 2019, the average annual revenue increased by 9% over the previous three-quarter average. If this trend continues, businesses in the region could qualify for larger loans in the future. Credit Where Credit is Due The third component that makes for a high loan approval rate is credit score. A good credit score can make the difference between being funded or denied, and good terms and bad terms. While this study looks at business owners’ personal credit scores, be aware that your business credit score also plays a part. In spite of their success in other areas, business owners in the Northeast have the lowest average credit score in the nation. While the national average credit score is 664, for business owners in the Northeast, the average is just 658. It’s important to note that the region has big outliers: business owners in Maine, New Hampshire, and Vermont have some of the worst credit scores in the nation, while those in New York and New Jersey rank among the top 15 states. As the study demonstrates, being approved for financing isn’t based on any single metric. In spite of their lower-than-average credit scores, business owners in the Northeast are making up for it with high revenues and more time in business. The takeaway? Focus on strengthening the parts of your business you can while remembering that ultimately, loan approvals come down to a mix of a number of different factors.