Biz2Credit Identifies San Jose as No. 1 Among Top 25 Cities for Small Business in 2020

Tech Hub Takes Crown Despite Pandemic-Rocked Year

NEW YORK, May 06, 2021 (GLOBE NEWSWIRE) -- Biz2Credit has identified San Jose as the “Best Small Business City in America,” based on average annual revenues, credit scores, age of business, and Biz2Credit’s proprietary BizAnalyzer score, which factors in the local business climate, including rents, cost of labor, and tax rates. Biz2Credit examined the financials of 32,000 companies that applied for small business loans – including companies that applied for PPP loans during 2020.

San Jose pushed San Francisco, off the top spot on the 2019 ranking. The other metropolitan areas in the top ten for small business growth in 2020 were: San Diego, Los Angeles, Boston, San Francisco-Oakland, New York, Tampa-St. Petersburg, Seattle, and Sacramento. In these top 10 metropolitan areas, the leading industries were: 1) professional, scientific, and technical services, 2) retail trade, and 3) other services (except public administration). Although the cities at the center of these metropolitan areas get most of the acclaim, Biz2Credit’s study measures metropolitan areas based on Census Bureau tracts, which captures a much more diverse range of businesses in an area than just the ones in downtown urban areas.

Overall, average annual revenues for small businesses in 2020 declined to $689K compared to $771K in 2019, a decrease of 10.6%. This reflects the direct impact of the economic toll that the coronavirus had on small businesses, many of which were forced to close due to pandemic mitigation efforts.

Somewhat surprisingly, average credit scores for business owners increased by 3.4% from 597 in 2019 to 617 in 2020. In fact, credit scores have increased across the board for consumers because of the much higher savings rate due to pandemic closures. Based on Biz2Credit’s findings, the same applies to business owners who may have been able to save on rent or other outstanding liabilities during government-mandated closure periods.

“Relying heavily on credit scores is a flawed predictor of business performance, yet many lenders utilize them as a major factor in making business loan decisions,” Arora said. “To make smart lending decisions, a wider range of factors should come into play, especially when you are serving the very smallest small businesses.”

Although real estate industry experts say suburban markets are booming because city dwellers want to escape the population density of urban areas and are able to work from home, new research highlights that strong economic fundamentals in big cities keeps them vibrant and attractive for small business. San Jose, CA, a major hub for the technology industry, has benefitted and maintained a robust economy for small businesses despite the pandemic.

“The technology industry in Silicon Valley continues to thrive, and San Jose is in the center of it all,” said Biz2Credit CEO Rohit Arora, one of the nation's leading experts in small business finance, who oversaw the research. “Miami, with its diverse economy, remains high ranking. Just two years ago it was the number one small business city in the country, and it is still near the top of the list. It also benefited from being in a state where coronavirus mitigation restrictions on business were less severe.”

For this analysis, Biz2Credit defined "small businesses" as companies having fewer than 250 employees or less than $10 million in annual revenues. The Top 25 Cities for Small Business in 2020 (with 2019 ranking in parenthesis) are:

2020 Rank        City        (2019 Rank)

  1. San Jose, CA (4)
  2. Miami-Fort Lauderdale, FL (3)
  3. San Diego, CA (6)
  4. Los Angeles, CA (5)
  5. Boston, MA (8)
  6. San Francisco-Oakland, CA (1)
  7. New York, NY (2)
  8. Tampa-St. Petersburg, FL (Not Ranked)
  9. Seattle, WA (9)
  10. Sacramento, CA (21)
  11. Orlando, FL (Not Ranked)
  12. Washington, DC (7)
  13. Baltimore, MD (10)
  14. Denver, CO (Not Ranked)
  15. Raleigh, NC (22)
  16. Portland, OR (13)
  17. Philadelphia, PA (18)
  18. St. Louis, MO (Not Ranked)
  19. Charlotte, NC (20)
  20. Chicago, IL (14)
  21. Riverside, CA (12)
  22. Minneapolis-St. Paul (25)
  23. Detroit, MI (11)
  24. San Antonio, TX (Not Ranked)
  25. Phoenix, AZ (16)

Tampa-St. Pete, Orlando, Denver, St. Louis, and San Antonio were previously unranked in the 2019 study.
Places that were ranked on the 2019 Biz2Credit list but fell off the 2020 list this year were: Austin (15), Milwaukee (17), Cincinnati (19), Pittsburgh (23), and Atlanta (24).

Small businesses in technology hubs are booming. The Top 10 metro areas by Annual Revenue*

1.San Jose, CA:$1,280,602
2.Miami-Ft. Lauderdale:$1,056,919
3.New York, NY:$1,035,781
4.Seattle, WA:$1,022,581
5.San Diego, CA:$1,019,886
6.Los Angeles, CA:$961,298
7.San Francisco-Oakland:$882,112
8.Tampa-St. Pete, FL:$844,073
9.Portland, OR:$832,234
10.Washington, DC:$795,106

* Average annual revenue measured during 2020

“Many of these companies can easily allow their employees to work from home, which actually has been proven to increase productivity,” Arora said. “Places like Las Vegas, which thrives on tourism and related industries, suffered a lot in 2020 because of the pandemic.”

When sorted by Age of Business (in months), cities in the Midwest and South had the youngest average age of business, an indication of startup activity and growth. Indianapolis has become a logistics hub, while the growth of newer businesses in Phoenix, Dallas, Houston and Orlando is an indication of population trends in which cities in warmer, business-friendly states have become increasingly popular places to live.

The top 10 cities with the youngest businesses (in months) were:

1.Indianapolis, IN:62
2.Phoenix, AZ:62
3.Dallas-Ft. Worth, TX63
4.Houston, TX64
5.St. Louis, MO64
6.Raleigh, NC65
7.Chicago, IL66
8.Birmingham, AL67
9.Orlando, FL70
10.Denver, CO70

“With the exception of Indianapolis, which is a major logistics hub, start-up activity was strongest in warm weather places like Phoenix, Dallas-Ft. Worth, and Houston,” Arora said.

When sorted by Credit Score, tech hubs, such as San Jose San Francisco, New York, and Boston showed the highest numbers.

1.San Jose, CA:650
2.San Francisco-Oakland641
3.Los Angeles:640
4.New York, NY:638
5.Boston, MA:637
6.Washington, DC:635
7.San Diego, CA:635
8.Raleigh, NC:632
9.Miami-Ft. Lauderdale:631
10.Tampa-St. Pete, FL:629

“Credit scores are usually better in areas where annual revenues are strong,” Arora explained.

About the Biz2Credit Best Small Business Cities in America Study
Biz2Credit analyzed 32,000 businesses with less than 250 employees and less than $10 million in annual revenues from across the country that have been in operation for more than one year.

About Biz2Credit
Founded in 2007, Biz2Credit has arranged more than $3 billion in small business financing. The company is expanding its industry-leading technology in custom digital platform solutions for banks and other financial institutions, investors, and service providers. Visit or Twitter @Biz2Credit, Facebook, and LinkedIn.

Media Contact: John Mooney, (908) 720-6057,