3 Things You Should Know About Small Business: September 12
NEW YORK (TheStreet) -- What's happening in small business today?
1. High-growth firms are flourishing in unexpected locations and industries. Small businesses typically look to Boston, New York and Silicon Valley as areas supporting high-growth industries and companies, but fast-growing firms are concentrated in unexpected regions and industrial sectors, according to a report by The Ewing Marion Kauffman Foundation.
As a result, state economic development programs, which traditionally target high-tech firms, may be missing 75% of high-growth companies, Kauffman says.
The study examined geographic trends of firms over a 30-year span of Inc. magazine's Inc. 500 lists to analyze how regional characteristics are associated with high-growth companies and innovations. Kauffman also surveyed Inc. 500 founders from 2000 through 2008 to provide insight into the movement of these entrepreneurs from the cities of their alma maters to the locations where they founded their companies.
"These findings offer important lessons for economic development leaders, such as to target firms that are high-growth rather than high-tech," says said Dane Stangler, director of research and policy at Kauffman.
While Silicon Valley and Austin, and other traditional high-tech hotbeds are well-represented among the cities that house high-growth companies, the research shows that Salt Lake City, Indianapolis, even Buffalo, N.Y., have accumulated a significant cache of Inc. 500 firms. The greatest number of Inc. firms is clustered in Washington, D.C., with nearly half of these firms operating in the government services sector, the report found.
2. Small business lending increases. The latest Biz2Credit Small Business Lending Index reports that small loan approvals in August rose at community banks and alternative lenders, while big banks experience a setback and lending approvals by credit unions fell for the third consecutive month.
According to Rohit Arora, CEO of Biz2Credit, the Small Business Administration's lending program that has been pushed by small banks has resulted in increased approval rates. However, loan approvals at credit unions have slowed because a number of them have reached the government-mandated lending cap of 12.25% of assets.