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Top 5 States for SBA Loan Approvals in 2023
The SBA approved more than 26,000 7(a) loans with a value of nearly $13 billion in the past six months. Find out which states had the most.
The SBA approved 26,381 SBA 7(a) loans of nearly $13 billion in the past six months, showcasing the importance of its financing products — even during a time when rates have increased.
This level of activity isn’t surprising: SBA-backed loans offer fantastic options for businesses that need to fund anything from working capital to equipment and real estate purchases. When the economy begins to slow, many small businesses have a real need for a capital infusion with advantageous terms.
In this article, we discuss the five states with the highest number of loans approved between October 2022 and March 2023, based on data from the Small Business Administration. We ranked the states on number, not loan volume, as it reduces the impact of differences in costs of living and regulations.
See the full list below:
Rank | State | SBA 7(a) Loans Approved | SBA 7(a) Loan Volume ($MM) |
|---|---|---|---|
1 | California | 2,825 | $1,777.4 |
2 | Florida | 2,059 | $1,085.0 |
3 | Texas | 1,840 | $1,295.7 |
4 | New York | 1,838 | $554.3 |
5 | Ohio | 1,773 | $465.3 |
5. Ohio
At fifth place on our list, Ohio’s approved SBA 7(a) loans totaled $465.3 million across 1,773 loans, according to data from the Small Business Administration. The Buckeye State has historically had significant small business activity, thanks in part to a low tax environment but also because of strong levels of community support.
Cincinnati, the state’s third-largest city, accounted for the highest volume of SBA 7(a) loans — 219 separate financing packages with a total volume of $81.6 million. That’s an average loan amount of about $372,400.
4. New York
Next up, New York is the state with the fourth-highest number of approved SBA 7(a) loans in the past two quarters. The $554.3 million in financing is spread across 1,838 loans. That’s already more than halfway to the state’s $1.1 billion in 7(a) loans approved last year.
Although many people associate New York with high costs of living and taxes, the small business environment is alive and well. According to a 2022 report from the SBA, there are 2.3 million small businesses in the state, accounting for 99.8% of all registered businesses. Together, they employ nearly half (48.1%) of the state’s workforce.
3. Texas
With 1,840 7(a) loans totaling $1.3 billion approved in the past half year, Texas takes third place on our list. Despite this high level of financing activity, it’s a long way off the record $3.9 billion approved in 2021. Still, businesses are alive and well in the Lone Star State, thanks to a healthy mix of tax incentives, demographic shifts bringing in more talent, and a nonintrusive regulatory environment.
So far this year, the largest number of SBA approvals have been focused in the state’s 3rd Congressional District, which encompasses the suburbs north and northeast of Dallas. There, 161 loans were approved, adding up to more than $90 million.
2. Florida
Florida lands in second place on our list, with 2,059 SBA 7(a) loans approved in the past six months for a total volume of $1.1 billion. The state is on track to exceed last year’s $2 billion. This is hardly a surprise: Florida is frequently cited as one of the best states in America to start a business.
Many startups need financing, and 7(a) loans are among the top options, as they can fund working capital and many other costs that can challenge newly formed small businesses.
1. California
California takes the top spot in our ranking, with 2,825 SBA 7(a) loans approved for a total of $1.8 billion — separating itself from the rest of the pack. California’s strong economy and ample networking opportunities make it a great place to start a business…but there are some significant challenges.
First and foremost, California’s complex business environment leads to higher costs for most businesses. Add that to higher costs of living — which translates into higher payroll costs — and it’s easy to see why many businesses turn to the SBA’s financing packages to see them through.