SBA loans and the Paycheck Protection Program have been frequently accessed in the past few years, with the number one state being New Jersey. While there are many factors, the COVID pandemic has placed many small businesses in peril, along with their medium and large-sized counterparts. New Jersey is the top state for loan approval rates, as nearly a quarter of their requests have been approved. New Jersey is nicknamed the "Garden" state, and has a unique cocktail of high credit scores, while also being close to some of America's largest metropolises and population.
Naturally, New York is a close second. In fact, one of the reasons why New Jersey took the number one place is its proximity to New York and Philadelphia, being in the middle of both states. This has given NJ a natural advantage, meaning that workers can take a train ride or vehicle commute to larger cities to earn more on their annual salary, especially when compared to their counterparts that are doing the same job with similar experience.
New York comes in at 19% approval, giving the Empire State one of the highest approvals per capita. This means that New York businesses, on average, are seen to have better credit scores and more established, predictable income. While there are debates over this, New York and California consistently post the highest cost of living in the country.
California has an approval rate of 14.2%, which may not sound too high, but is only 3 places from the top. California enjoys booming healthcare and technological centers, with it being home to Silicon Valley. This has given California the most expensive real estate prices in the country, as there has been a massive influx of domestic and international immigrants into the state, especially on work visas, to chase the new "American Dream". While this may seem like a good thing, it is actually extremely risky on the loan approval front. Silicon Valley and start-ups are extremely risky and do not have a predictable income, making them a nightmare for established programs and corporations to lend or fund.
Texas has a relatively high rate, but much lower than New York or California. Coming in at a 10% approval rate, SBA loans are frequently applied within the state due to unique economic conditions. Although Texas has a lower rate than its comparable flourishing metropolitan states, it is the state with the most SBA loans, in terms of volume. This means that although Texans may not necessarily have the greatest credit scores, money is being invested into the state to power an extremely influential economy.
Mississippi has the second lowest median income in the country, at $44,700. Although the cost of living is greatly reduced here, many still default on their loans, as this state has had the lowest credit score since the middle of 2020. The average credit score in Mississippi is 662, due to its high mortgage delinquency rate.