Although known as the home of some of the nation’s largest and most successful corporations (Amazon, Cisco, eBay, PayPal, Adobe and others), San Jose is “America’s Best Small Business City,” based on average annual income in 2021, credit scores, business age and BizAnalyzer score of Biz2Credit owner. It’s the second year in a row that San Jose has come out on top in Biz2Credit’s annual rankings.

Biz2Credit factors in the local business climate, including rents, labor costs and local tax rates in examining the finances of over 82,000 companies that applied for small business loans in 2021, including companies that applied for PPP loans.

According to Biz2Credit’s new study, the top 10 best small business cities in 2021 were: San Jose, Baltimore, New York, Boston, San Francisco, Los Angeles, Washington, DC, Portland, OR, Providence, RI and Denver .

With Silicon Valley booming, it’s no wonder San Jose has repeated as the no. 1 among the 25 Best Small Business Cities for 2021. Other tech hubs including New York, Boston and San Francisco also fared well.

Baltimore and Washington, DC moved up the list dramatically, which is likely the result of an increase in the number of businesses serving the growing federal workforce. Among the top 10 metropolitan areas, the top industries were: professional, scientific and technical services; Retail trade; and construction.

Overall, the median annual income for small businesses in 2021 fell to $539,000 from $689,000 in 2020. This reflects the economic toll the coronavirus has had on small businesses, many of which have had to close due to struggling to mitigate the pandemic.

Average credit scores for business owners decreased from 617 in 2020 to 604 in 2021. Clearly, the pandemic had an impact on credit scores.

In addition, some businesses that benefited from PPP money in 2020 did not receive it in 2021. As operations resumed after COVID-related shutdowns, the cost of doing business increased, which hurt business owners’ credit scores.

For this analysis, Biz2Credit defined “small businesses” as companies that have fewer than 250 employees or less than $10 million in annual revenue. The 25 best cities for small business in 2021 are:

Ranking 2021 (Rank 2020)

1. San Jose (1)

2. Baltimore (13)

3. New York (7)

4. Boston (5)

5. San Francisco-Oakland (6)

6. Los Angeles (4)

7. Washington, DC (12)

8. Portland (16)

9. Providence, RI (Unranked)

10. Denver (14)

11. San Diego (3)

12. Sacramento (10)

13. Miami-Ft. Lauderdale (2)

14. Seattle (9)

15. Tampa-St. Pete (8)

16. Lakeland-Winter Haven, FL (unranked)

17. Austin, Texas (unranked)

18. Port St. Lucie, FL (Unranked)

19. Orlando (11)

20. Houston (unranked)

21. Nashville (Unranked)

22. Riverside, CA (21)

23. Cleveland (unranked)

24. Saint Anthony (24)

25. Philadelphia (17)

Seven cities ranked in Biz2Credit’s Top 25 “Best Small Business Cities” unranked in 2020: Providence, NY; Lakeland-Winter Haven, FL; Austin, Texas; Port St. Lucie, FL; Houston; Nashville; and Cleveland.

The pandemic showed many entrepreneurs — especially those who own technology companies and other firms that can operate virtually — that they didn’t need to be in big cities. That’s why cities like Providence, Lakeland-Winter Haven and Port St. Lucie entered the list.

Meanwhile, seven cities in the new Biz2Credit Top 25 ranking for 2020 dropped from the list (2020 bracket rankings): Raleigh (15), St. Louis (18), Charlotte (19), Chicago (20), Minneapolis-St. Paul (22), Detroit (23) and Phoenix (25).

Top 10 metro areas from Annual income*

1 Fresno, CA: $821,720

2 San Francisco: $661,241

3 San Diego: $611,083

4 Port St. Lucie, FL: $608,148

5 Denver: $603,712

6 New York: $577,173

7 Boston: $558,627

8 Austin, Texas: $528,877

9 Portland: $519,757

10 San Jose: $509,485

* Average annual income measured during 2021

Incomes have decreased significantly for small businesses. In last year’s study, businesses in San Jose, Miami, New York, Seattle and San Diego averaged over $1 million in annual revenue. A year later, in 2021, no city in Biz2Credit’s rankings had a median income above $825,000.

It appears that small businesses in 2021 were dealing with restrictions related to COVID, consumer fear of going out, and the emergence of the Omicron variant, which hit at the end of the year just as restaurants and entertainment venues were starting to open. recover.

Metropolitan areas with Highest number of small business loan applications in 2021 they were:

1. San Jose

2. Baltimore

3. New York

4. Boston

5. San Francisco

6. Los Angeles

7. Washington, DC

8. Portland

9. Providence

10. Denver

Biz2Credit’s analysis was also examined Business Age (per month), an indicator of initial activity. There were several arrivals in 2021, including Fresno, CA; Tulsa, OK; Columbus, OH; Lakeland-Winter Haven, FL; and Memphis, TN. The top 10 cities with the youngest age of business (in months) were:

1. Kansas City: 42

Omaha: 42

Denver: 42 (tie)

4. Fresno, CA: 43

Memphis: 43

Columbus, OH: 43 (tie)

Lakeland-Winter Haven, FL: 43 (tie)

Washington, DC: 43 (tie)

Tulsa, OK: 43 (tie)

10. Riverside, CA: 44

Pittsburgh: 44 (those)

Seattle: 44 (tie)

Grand Rapids, MI: 44 (tie)

Baltimore: 44 (tie)

Miami: 44 (tie)

The pandemic showed many entrepreneurs — especially those who own technology-based companies — that they didn’t need to be in big cities. That’s why we see Midwestern cities like Kansas City, Omaha, Columbus, Pittsburgh, and Grand Rapids on the list of newest businesses, which is a sign of new businesses starting up.

When sorted by Credit scoretech hubs such as San Jose, New York, San Francisco and Boston were among the cities with the highest FICO scores.

1. Providence: 618

2. San Jose: 617

New York: 617 (tie)

4. Boston: 614

5. San Francisco: 610

6. Los Angeles: 609

Seattle: 609 (tie)

8. Sacramento: 608

9. Portland: 607

Washington, DC: 607 (tie)

Average credit scores fell sharply in 2021. For example, in last year’s study, top-ranked San Jose came out on top with an average of 650 points and Tampa No. 10 was in 629.

This year, the city with the highest average credit score was Providence at 618, a figure that would not have cracked the top 10 in 2020.

There’s no doubt that 2021 was a tough year for countless small businesses. COVID shook all aspects of the economy and many companies are still recovering. However, companies involved in industries, such as technology, that did not require face-to-face interactions fared better due to pandemic fears. Further, entrepreneurs chose to go to other cities in places like Florida, where the weather is pleasant and the land is (relatively) cheaper.

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