Information technology (IT) companies have outperformed companies in other industries in most performance metrics since the COVID pandemic hit in 2022. Biz2Credit analyzed industry trends in 2021 among 30,000 small businesses and finds IT companies had the highest average revenue ($955,793 ), the best credit score (658), and received the highest average amount of financing ($131,743) when they sought credit.
Retail had the largest percentage (27.7%) of all funding provided to small businesses in the study, while most startups were in the transportation and storage sector (the lowest amount of time in business on average).
Biz2Credits 2022 Top Small Business Industries Report examined the following metrics: annual revenue, loan approval rates, amounts funded, credit scores of business owners, and age of business.
- The industry with the highest average financing amount used to be Information Technology (IT) ($131,743), followed by wholesale ($107,576), agriculture, forestry, fishing and hunting ($94,333), manufacturing ($83,700), and administrative support, waste management, and recovery services ($67,801).
- THE entrepreneurs had highest average credit score (658), followed by Real Estate & Rental Leasing (648), Manufacturing (645), Professional, Scientific, and Technical Services (633), and Wholesale Trade (629). Credit scores generally fell as the savings rate began to fall after the end of most government-backed stimulus programs in mid-2021.
- Companies in the IT sector had the highest average turnover ($955,793), followed by Manufacturing ($947,662), Wholesale ($886,834), Retail ($808,598), and Lodging/Food Services ($725,243).
- The Retail had the largest percentage (27.7%) of all financing for small businesses, followed by healthcare and social assistance (10.7%), services other than public administration (10.4%), housing and food (10.4%), and construction (7 .2%).
- Transport & storage was the industry with the latest companies (3.9 years), followed by Public Administration (4.6 years), Arts, Entertainment and Recreation (4.8 years), Services other than Public Administration (4.8 years), and Retail (5.1 years). The companies with the longest tenure were, on average, information technology (7.4 years), manufacturing (7.1 years), agriculture, forestry, fishing and hunting (6.8 years), healthcare and social assistance (6.5 years), and professional , scientific and technical services (6.5 years).
Demand for IT services continues to grow as more companies adopt remote working in the aftermath of the pandemic. IT companies saw the highest average approval rates for funding applications. While these companies generally did well, their customers are often larger companies that take longer to pay third-party suppliers. Thus, they end up borrowing money to manage their available cash from month to month.
Biz2Credit, a leading provider of online financing for small businesses, analyzed the financial performance of more than 30,000 applications submitted through the company’s online financing platform from January 2021 to December 2021. All companies included in the Biz2Credit study have less than 250 employees and less than $10 million in annual revenue.
The report covers small businesses across the country, from start-ups to established companies. In addition, this year’s report analyzed credit data based on the Small Business Administration’s database. The purpose of the study is to identify the top small business sectors in the previous year and to measure the performance of companies based on their industry. To view the entire report, click here.
The report covers industries based on the NAICS classification system, including the following:
- Accommodation and food service: Restaurants and bars, caterers, hotels, motels, others.
- Agriculture, forestry, fishing and hunting: Farms, farms, dairies, greenhouses, nurseries, orchards or hatcheries.
- Business and professional services: Accounting and tax preparation, accounting, payroll, as well as legal, marketing and design services.
- healthcare: General Medical Services, Doctor’s Offices, Dental Offices, Visiting Nursing Services, Residential Care Facilities, Physiotherapy Practices, Mental Health Clinics.
- Information Technology (IT): Software developers, software consultants, high-tech employment agencies.
- production: Companies involved in the manufacture of both durable and non-durable goods.
- Personal services: salons, gyms, dance and yoga studios, laundry and dry cleaning, landscaping, cleaning services and more.
- Retail: physical stores, e-commerce companies, clothing and fashion, florists, supermarkets, pharmacies, home furnishings and more.
- Wholesale: Food distributors, grocery wholesalers, distributors of various durable goods.