NEW YORK, Aug. 28, 2019 (GLOBE NEWSWIRE) -- In an examination small business loan funding trends, restaurants & accommodation businesses had the highest loan approval rates (51%) in 2018 compared to other industries, including retail, health care, and professional and personal services, according to a new study by Biz2Credit.
| Industry | Approval rate | |
| Restaurants & Accommodation | 51 | % |
| Health Care and Social Assistance | 37 | % |
| Retail Trade | 36 | % |
| Information Technology (IT) | 35 | % |
| Professional Services | 31 | % |
| Personal Services | 16 | % |
“Restaurants and other food and accommodation businesses are inherently more risky than other types of businesses. However, with a strong lending atmosphere, the approval rates have been surprisingly high,” said CEO Rohit Arora, who oversaw the research. “One reason for this result is that many food businesses do not qualify for traditional bank loans, but they are able to get funding via non-bank lenders, who charge higher rates but are willing to provide funding.”
Similarly, retail businesses have seen high approval and funding rates on the Biz2Credit platform.
For the analysis, Biz2Credit examined the financials of companies that applied for funding in 2018 in the following sectors: restaurants & accommodation, healthcare, personal services, professional services, retail, and information technology (IT).
Technology companies led in terms of average funded amount, followed by retail, restaurants, personal services, healthcare, and business & professional services.
| Industry | Avg. Funded Amount |
| Technology | $102,029 |
| Retail | $73,564 |
| Restaurant & Accommodation | $59,746 |
| Personal Services | $52,989 |
| Healthcare | $49,835 |
| Business & Professional | $43,248 |
“Technology firms, which have performed well in this economy, received the largest average amount of funding,” Arora said. “Tech businesses received the highest level of funding in New Jersey. The highest levels for retail and restaurants & accommodation were in New York. Personal services funding was highest in Texas, but professional services funding was highest in Massachusetts. For healthcare, California was the leader.”
| Industry | State | Average Funded Amount | National | Average Funded Amount |
| Technology | New Jersey | $251,250 | National | $102,029 |
| Retail | New York | $121,867 | National | $73,564 |
| Personal Services | Texas | $116,154 | National | $52,989 |
| Restaurant | New York | $106,701 | National | $59,746 |
| Business & Professional | Massachusetts | $77,538 | National | $43,248 |
| Healthcare | California | $66,010 | National | $49,835 |
“Businesses in New York, New Jersey, Texas, and California all did well – particularly in IT and, somewhat surprisingly, in retail,” Arora explained. “These states are home to many immigrants and first-generation Americans, who are typically very entrepreneurial. They are also areas where the real estate markets are strong.”
The industry with the most startup growth was personal services, for which the average age of business was slightly more than three years (37 months), followed by retail (44 months) and restaurants & accommodation (46 months).
The credit scores of the owners of IT companies rated highest, followed by the scores of business owners in the retail, healthcare, restaurant & accommodation, business & professional Services, and personal services.
| Industry | Average Credit Score |
| Technology | 633 |
| Retail | 619 |
| Healthcare | 617 |
| Restaurant & Accommodation | 615 |
| Business & Professional Services | 615 |
| Personal Services | 590 |
“Technology firms had the highest credit scores and, not surprisingly, the highest average funded amount,” Arora explained.
| Industry | Average Revenue |
| Restaurant & Accommodation | $509,996 |
| Healthcare | $403,828 |
| Retail | $402,403 |
| Technology | $357,083 |
| Business & Professional Services | $328,361 |
| Personal Services | $215,796 |
“Restaurants have the highest revenues. However, they also are high cost/low margin businesses,” Arora said. “Healthcare businesses had the second highest average revenues. With the oldest of the Baby Boomers now reaching their mid-seventies, I expect that companies that cater to their needs will continue to thrive.”
Industry breakout of businesses
Accommodation & Food Service: Restaurants/bars, caterers, hotels, other food businesses.
Business & Professional Services: Accounting and tax preparation, bookkeeping, payroll services, legal services, marketing, and design services, among other businesses.
Healthcare: General medical services, doctor’s offices, dentist’s offices, visiting nurse services, residential care facilities, outpatient care centers (ex: physical therapy), mental health facilities.
IT: Software developers, consultants, staffing firms
Personal Services: Beauty (hair and nail salons), gyms, dance studios, yoga studios, laundry and dry cleaning, landscaping, cleanings services.
Retail Trade: Brick-and-mortar stores, ecommerce companies, clothing and fashion, florists, grocery stores, pharmacies, home furnishings, and vending machine operators.
About the Biz2Credit Industry Funding Study
For this analysis, Biz2Credit analyzed nearly 30,000 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 $2 billion in small business financing, has several times been named to Crain’s New York’s Fast 50 and was recently ranked among the top 200 fast-growing companies on Deloitte's 2018 Technology Fast 500. Biz2Credit is expanding its industry-leading technology in custom digital platform solutions for leading banks and other financial institutions, investors and service providers in the U.S. Visit www.biz2credit.com or follow Biz2Credit on Twitter: @Biz2Credit, Facebook, and LinkedIn.