A recent study by business formation experts CreditDonkey has highlighted the states with the highest and lowest average business loans in the United States. The analysis of U.S. Small Business Administration (SBA) lender reports from 2020 to 2023 uncovered significant disparities in the average loan amounts granted to businesses across the country.
Vermont businesses have emerged as recipients of the lowest average business loans, with an average loan value of $254,815. This figure is 51% lower than the national average. Over the four-year period, Vermont saw $213 million distributed across 837 loans. This indicates a cautious approach to borrowing among Vermont businesses, or possibly a more conservative lending environment.
Following Vermont, Maine businesses received the second-lowest average loan amount, at $268,988. In total, $463 million was approved across 1,724 loans in the state. Ohio businesses were granted the third-lowest average loan amount of $277,388, with a total of $4.5 billion spread over 16,413 loans.
Hawaii and Maryland also featured prominently among states with lower average loan amounts. Hawaiian businesses secured an average of $316,343 across 560 loans, amounting to $177 million. Maryland’s average loan amount was $325,292, with $1.5 billion approved across 4,737 loans. These figures are 37% lower than the national average.
States with the lowest average approved loans (2020-2023)
|
Rank |
State |
No. of Approved Loans |
Total Loan Amount ($) |
Average Loan Amount ($) |
|
1 |
Vermont |
837 |
213,279,786 |
254,815 |
|
2 |
Maine |
1,724 |
463,734,775 |
268,988 |
|
3 |
Ohio |
16,413 |
4,552,761,776 |
277,388 |
|
4 |
Hawaii |
560 |
177,152,105 |
316,343 |
|
5 |
Maryland |
4,737 |
1,540,905,956 |
325,292 |
|
6 |
New Hampshire |
2,072 |
676,024,614 |
326,267 |
|
7 |
Kentucky |
2,580 |
898,336,428 |
348,192 |
|
8 |
West Virginia |
754 |
264,349,626 |
350,596 |
|
9 |
Massachusetts |
6,452 |
2,331,264,294 |
361,324 |
|
10 |
Delaware |
696 |
270,491,850 |
388,638 |
Conversely, the study revealed that Georgia businesses received the highest average business loans in the U.S., with an average of $816,892. The total amount approved in Georgia over the four-year period exceeded $6 billion, across 7,429 loans.
Texas ranks second, with an average loan amount of $807,003, which is 56% higher than the national average. Businesses in Texas were approved for over $13.6 billion across 16,920 loans.
California ranks third, with an average loan value of $803,703. Over the period, California businesses were approved for more than $23.8 billion across 29,698 loans, the highest total loan amount and number of loans in any state.
North Carolina and Arizona complete the top five states with the highest average business loans. North Carolina businesses received an average of $755,089, totalling over $3.8 billion across 5,054 loans. Arizona businesses secured an average of $704,958, with more than $3.4 billion approved across 4,916 loans.
The top ten states with the highest average business loans from 2020 to 2023 are as follows:
- Georgia: 7,429 loans totalling $6,068,691,136, with an average of $816,892.
- Texas: 16,920 loans totalling $13,654,486,487, with an average of $807,003.
- California: 29,698 loans totalling $23,868,365,682, with an average of $803,703.
- North Carolina: 5,054 loans totalling $3,816,222,114, with an average of $755,089.
- Arizona: 4,916 loans totalling $3,465,571,854, with an average of $704,958.
- Louisiana: 1,572 loans totalling $1,077,552,343, with an average of $685,466.
- Alaska: 481 loans totalling $326,199,500, with an average of $678,169.
- Tennessee: 2,516 loans totalling $1,677,941,083, with an average of $666,908.
- Nevada: 2,460 loans totalling $1,626,207,980, with an average of $661,060.
- South Carolina: 2,694 loans totalling $1,779,940,330, with an average of $660,705.
Anna Ge, Director of Research at CreditDonkey, commented on the findings: “While businesses source loans for various reasons, including positive progression, many seek extra financing to ease immediate or long-term financial difficulties. The results may suggest that businesses in Vermont and Maine handle their finances better than those in states like Georgia and Texas. However, it could also indicate a greater eagerness for expansion among businesses in states with larger financial funding.”
Ge emphasised that all loans must be balanced with company revenue to gain a full picture of a business’s situation. “High loan amounts should be prioritised when planning the future of a company and should not be considered merely as a quick fix,” she added.
For more information, visit https://www.creditdonkey.com/best-llc-services.html.
