A Biz2Credit Research Report On 2014 s Best Small Business Cities in America

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A Biz2Credit Research Report On

2014’s Best Small Business Cities in America

May 14

th

2014

Rohit Arora, CEO

Helping Small Businesses Grow…

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Biz2Credit in a few words…

Biz2Credit is an online marketplace that equips small and medium size businesses with tools needed to analyze their financial health and equips banks with the tools to more efficiently manage their small business lending process. Proprietary technology streamlines the loan application process and

connects borrowers to lenders using a patented credit algorithm.

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• Funded over $1 Billion to date

• Over 1,200 lenders on our platform, including 50+ micro-lenders

• Has direct reach to over 1.6 million small and medium sized business owners

2012 - Entrepreneur.com Top Small Business Finance Resource 2011 - Crain’s Top Entrepreneur

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Biz2Credit in a few words…

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Small Businesses:

The Backbone of The American Economy

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Small Businesses: Facts

• Over half of America’s workers own or work for a Small Business

• Small Businesses have generated over 64% of new jobs in the last 15 years

• Small businesses create 2 out of every 3 jobs today

• Add greatly to the economic growth of the country

• From Farmers to Mechanics to Doctors – Small Businesses are everywhere!

Source: U.S. Department of Housing and Urban Development

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Biz2Credit Study:

2014’s Top Cities for Small Businesses in America

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Small Businesses: Facts

For this study, Biz2Credit Analyzed over 12,000 Small Businesses across America to determine the best cities for small businesses, women owned businesses and Minority owned businesses.

Factors studied to determine the rankings include:

• 250 Employees or Less

• Less than $10 million in Annual Revenues

• Annual Business Revenues

• Business Credit Scores

• Debt-to-Income Ratio

• Age of Business

• Type of Business

• Business Owners’ Personal Credit Scores

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Results: 2014’s Top Cities for Small Business 7

After Analyzing over 100 cities, the results for the top cities for Small Businesses:

Rank Top 25 Metro areas with the highest applications in 2013 Average Annual Revenue

Average Credit Score

Average of Age in Months

Average BizAnalyzer

Score

1 San Jose-Sunnyvale-Santa Clara, CA $ 499,811 685 67.4 57.7

2 Detroit-Warren-Dearborn, MI $ 730,013 637 39.4 55.5

3 Denver-Aurora-Lakewood, CO $ 482,434 649 46.0 55.1

4 Los Angeles-Long Beach-Anaheim, CA $ 752,154 641 58.6 53.9

5 San Francisco-Oakland-Hayward, CA $ 274,164 637 51.9 53.7

6 Las Vegas-Henderson-Paradise, NV $ 497,677 649 39.4 53.6

7 New York-Newark-Jersey City, NY-NJ-PA $ 574,801 637 47.3 52.6

8 Atlanta-Sandy Springs-Roswell, GA $ 384,282 623 45.4 52.5

9 Washington-Arlington-Alexandria, DC-VA-MD-WV $ 224,982 629 34.9 52.5 10 Miami-Fort Lauderdale-West Palm Beach, FL $ 375,856 625 46.9 52.2

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“San Jose remains the center of innovation and new business job creation in the U.S.”

“Surprisingly, Detroit-Dearborn scored very well in large part because of the auto industry’s rebound

and the growing technology sector in the area.”

“While revenue figures are usually higher for New York-based companies, so are the costs of operation. The minimum wage is higher, and now Mayor DeBlasio

has expanded paid sick leave.

This hinders small business owners,”

Results: 2014’s Top Cities for Small Business 8

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"San Jose remains the center of innovation and new business job creation in the U.S., Surprisingly, Detroit-Dearborn scored very well

in large part because of the auto industry’s rebound and the growing technology sector in the area.”

- Biz2Credit CEO Rohit Arora,

“While revenue figures are usually higher for New York-based companies, so are the costs of operation. The minimum wage is

higher, and now Mayor DeBlasio has expanded paid sick leave.

This hinders small business owners, When fixed and marginal costs are high, it impacts cash flow significantly. There is also some fallout still from Hurricane Sandy and its impact on small

businesses. This, too, hurt New York’s ranking.”

- Biz2Credit CEO Rohit Arora,

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Biz2Credit Study:

2014’s Top Cities for Minority Owned Small Businesses

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Results: 2014’s Top Cities for Minority Owned SB 11

After Analyzing over 100 cities, the results for the top cities for Small Businesses:

Rank Top 25 Metro areas with the highest applications in 2013 Average Annual Revenue

Average Credit Score

Average of Age in Months

Average BizAnalyzer

Score

1 San Jose-Sunnyvale-Santa Clara, CA $ 446,395 665 69.6 56.8

2 Denver-Aurora-Lakewood, CO $ 734,761 640 56.8 54.3

3 San Diego-Carlsbad, CA $ 971,025 647 62.3 53.9

4 Riverside-San Bernardino-Ontario, CA $ 1,380,613 608 41.8 53.8

5 San Francisco-Oakland-Hayward, CA $ 390,510 627 68.1 52.7

6 Indianapolis-Carmel-Anderson, IN $ 610,646 620 50.7 52.6

7 Los Angeles-Long Beach-Anaheim, CA $ 827,148 638 47.1 52.4

8 New York-Newark-Jersey City, NY-NJ-PA $ 486,141 635 44.7 51.9

9 Atlanta-Sandy Springs-Roswell, GA $ 427,100 614 46.0 51.8

10 Miami-Fort Lauderdale-West Palm Beach, FL $ 417,819 620 43.7 51.6

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"Centers of technological innovation are booming. Cities like Portland and Jacksonville are taking advantage of their slower pace, lower costs and good

standard of living offered to residents“

“While New York City is an appealing location for entrepreneurs to start a business, the reality is that high fixed and marginal costs negatively impact the bottom line

of small business owners”

According to statistics from the U.S. Census Bureau, African Americans (just over 25%) Hispanics (28.6%) and Asians (12.7%) combine to comprise the majority

of New York City’s population.

"San Jose is a hub for small business, but people might not immediately expect it to be a booming place for minority-owned companies"

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Results: 2014’s Top Cities for Minority Owned SB

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"San Jose is a hub for small business, but people might not immediately expect it to be a booming place for minority-owned companies," According to U.S. Census Bureau statistics, Hispanics represent nearly a third of the population in San Jose, while Asians (non-Hispanic) represent just over 30 percent of the population.

“Surprisingly, Denver scored very well in the study, largely because of the booming fresh produce and organic food industry, which is

popular amongst minorities.”

- Biz2Credit CEO Rohit Arora,

“While New York City is an appealing location for entrepreneurs to start a business, the reality is that high fixed and marginal costs negatively impact the bottom line of small business owners,” Arora

explained. According to statistics from the U.S. Census Bureau, African Americans (just over 25%) Hispanics (28.6%) and Asians (12.7%) combine to comprise the majority of New York City’s

population.”

- Biz2Credit CEO Rohit Arora,

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Biz2Credit Study:

2014’s Top Cities for Women Owned Small Businesses

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Results: 2014’s Top Cities for Women Owned SB 15

After Analyzing over 100 cities, the results for the top cities for Small Businesses:

Rank Top 25 Metro areas with the highest applications in 2013

Average Annual Revenue

Average Credit Score

Average of Age in Months

Average BizAnalyzer

Score

1 Jacksonville, FL $ 1,395,927 576 32.6 45.2

2 Charlotte-Concord-Gastonia, NC-SC $ 1,146,263 591 46.6 52.3

3 Chicago-Naperville-Elgin, IL-IN-WI $ 1,076,557 621 40.4 49.5

4 Denver-Aurora-Lakewood, CO $ 1,011,458 638 62.0 54.6

5 Pittsburgh, PA $ 547,125 620 38.0 47.6

6 Atlanta-Sandy Springs-Roswell, GA $ 504,944 601 46.7 49.9 7 Los Angeles-Long Beach-Anaheim, CA $ 464,623 632 43.3 52.6 8 Las Vegas-Henderson-Paradise, NV $ 427,297 628 33.3 52.5 9 Dallas-Fort Worth-Arlington, TX $ 400,474 600 34.7 45.4 10 San Francisco-Oakland-Hayward, CA $ 395,720 633 60.8 50.1

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"Denver scored very well because of its thriving technology sector, as well as its growing organic food and tourism industries”

“Baltimore ranked surprisingly high in the study of women-owned businesses because the city was not in the top 25 among cities nationally. Many companies

in the Baltimore-Washington corridor have gotten Woman-Owned Business Certification, which helps with federal contracts and other advantages.”

.“Midwestern cities like Milwaukee are growing in the high-tech and medical technology industries. High end IT startup companies are beginning to emerge in this area. Further, traditional manufacturing hubs are evolving and supporting

IT companies, and many of them are women-owned.”

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Results: 2014’s Top Cities for Women Owned SB

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"Denver scored very well because of organic food, and tourism, Baltimore ranked surprisingly high. This is because there are many companies in the Baltimore-Washington corridor have gotten Woman-Owned Business certification, which helps with federal contracts. For this reason, Baltimore ranks much higher for women-owned businesses than it does in the overall national analysis conducted by Biz2Credit.” - Biz2Credit

CEO Rohit Arora,

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The Small Business Lending Industry &

The Financial Struggles Business Owners Face

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The 2008 Recession took a big toll on small business lending and the effects are still

• 19.1% Reduction in Small Business Lending since 2008

• Loans to Midsize and Large companies saw a 12% increase in the same period

• Recession hit small businesses had nowhere to go – Rejected by Banks, Denied by the government

• Disconnect between commercial bankers and small businesses over Asset Valuation and Business understandings

Lending to Big Businesses has gone up and to Small Businesses has gone down

“When you don’t need money, you get offers. When you need money, you are denied”

The Problem: Small Businesses & the Credit Crunch 19

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Why Biz2Credit was Created…

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To fix the fundamental problem

in the market today 21

SMALL BUSINESS OWNERS

BANKS & OTHER LENDERS LACK OF

TRANSPARENCY

• What product is best for me?

• Where do I go?

• Am I getting the best rate?

• Process too cumbersome

• How do I find good borrowers?

• How risky are they?

• How do I retain customers?

• How do I manage declines?

• Process too cumbersome

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Biz2Credit is the solution 22

SMALL BUSINESS OWNERS

BANKS & OTHER LENDERS MARKETPLACE

Online

quicker

simpler

lower risk

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Thank you

For questions of more information, please contact:

Rohit Arora CEO

Phone: 212.644.4555

Email: rohit.arora@biz2credit.com

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References

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