05/04/18

The Best States for Small Business Lending: #9 Massachusetts, #10 Illinois

In honor of National Small Business Week, Lendio announced the Top 10 Best States for Small Business Lending. Based on a calculation of several key indicators among thousands of Lendio’s customers, the findings show that not only did demand for small business loans increase significantly in the last year, but business owners borrowed significantly larger amounts to help grow their operations.

The Bay and Prairie states rank No. 9 and No. 10 respectively on the list. Find out why Massachusetts and Illinois are prime places for small business to boom. (Read all about the No. 1 and 2, No. 3 and 4No. 5 and 6, and No. 7 and 8 states here.)

#9 Massachusetts

Massachusetts is home to almost 640,000 small businesses that employ 1.4 million people. The tech industry is a major source for growth in the state, and Boston is widely considered the Silicon Valley of the east. Tech growth in Massachusetts boosts other industries as people flock to high-paying job opportunities and the demand for all types of goods and services expands. In spite of these positive developments in the Bay State, Massachusetts business costs, including energy and taxes, remain the highest in the contiguous U.S., and the regulatory climate is a major obstacle for businesses.

One key to Massachusetts’ success lies in its top-notch higher education. The state is home to some of the best universities in the country, and many of the graduates from these prestigious schools stay in state to work and start businesses. The creativity and contributions of a competitive labor force brings in the third most VC funding of any state in America behind only California and New York.

The Best States for Small Business Lending: #9 Massachusetts, #10 Illinois

Massachusetts Small Business Statistics

Total number: 639,334
Total number of employees: 1.4 million
Percent of Massachusetts businesses: 99.5%
Percent of Massachusetts employees: 46.8%

Top 5 Industries for Small Businesses

Professional, Scientific, and Technical Services
Construction
Other Services (Except Public Administration)
Real Estate and Rental and Leasing
Health Care and Social Assistance

Fun Facts:

A Lendio franchise located in Boston is making it easier for Massachusetts’ small businesses to gain access to the funding they need.

Read about how a popular watering hole for Boston sports fans weathers seasonal cash flow droughts.

#10 Illinois

Illinois is a strong newcomer to this year’s top 10 states list. The lion’s share of small businesses in the state are located in or around Chicago. As one of the nation’s largest cities, Chicago is a bright spot for innovation and GDP growth. Three million plus residents form an attractive and diverse market for entrepreneurs in virtually any industry. Chicago’s transportation situation is also ideal. A strong rail system and close proximity to two international airports make it possible for businesses to quickly ship goods all over the world. The universities in and around Chicago provide a skilled, highly-educated workforce.

Small business owners in Illinois are both enduring and optimistic. Illinois taxes run high, and the state’s credit rating is the worst in the country, making it tougher for business owners to borrow money. Political gridlock in Springfield has also perpetuated budgetary and financial issues. While economic recovery since the recession has been slow, the state’s No. 10 placement on this year’s list is a good sign. Despite the obstacles they face, entrepreneurs are becoming increasingly comfortable starting businesses and looking for financing solutions.

The Best States for Small Business Lending: #9 Massachusetts, #10 Illinois

Illinois’ Small Business Statistics

Total number: 1.2 million
Total number of employees: 2.4 million
Percent of Illinois businesses: 99.6%
Percent of Illinois employees: 46.0%

Top 5 Industries for Small Businesses

Other Services (Except Public Administration)
Professional, Scientific, and Technical Services
Health Care and Social Assistance
Construction
Real Estate and Rental and Leasing

Fun Facts:

A Lendio franchise located in Naperville is making it easier for Illinois’ small businesses to gain access to the funding they need.

Read about how a fifth-generation family business in Illinois kept its doors from closing post-recession.

Get more small business tips from Lendio.

About the author

Chris Glenn
Chris Glenn
Chris is part of Lendio's PR team and a student at Brigham Young University. He loves creating communicative magic and believes in the power of words to change the world. When he's not in class or at the office, Chris can be found breaking ankles on the basketball court or shredding The Greatest Snow on Earth.

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