Posted by Shivali Anand
February 28, 2022 | 2-minute read (311 words)
Small businesses with the strongest recoveries overall from COVID-19 pandemic losses have one thing in common: they are in the financial services sector, according to a study by small business lending platform Biz2Credit. IT companies also showed high overall performance across key dimensions of small business financial health, the study found.
The 2021 Biz2Credit Recovery Ranking ranks industries according to their ability to rebound from disruptions wrought by the pandemic. It aims to measure the degree to which they are struggling to remain viable as the pandemic stretches on.
The study assessed the financials of the more than 200,000 small firms that filed credit requests using Biz2Credit's online platform. Its ranking weighed the number of PPP loans approved by company, as well as their demand for capital. Only small enterprises with fewer than 250 workers and annual revenue of less than $10 million were included in the research.
• The finance and insurance industries had the strongest rebounds in 2021, followed by retail, real estate, and wholesale trade.
• Educational services, the arts, entertainment and leisure showed a slow recovery.
• IT businesses showed a boom, with average revenue and owners’ credit scores jumping higher than other businesses.
• Financial services and insurance companies showed strong demand for expansion financing and low levels of distress.
• Overall, the financial services sector was found to be the most resilient amid the pandemic in 2021.
• The transportation sector saw the highest number of startups.
“Financial and realty businesses did exceptionally well at recovering from the pandemic,” said Biz2CreditT CEO Rohit Arora. “As the pandemic raged, Information Technology businesses boomed, seeing their average revenue and owners’ credit scores rise above other businesses. Meanwhile, the rise of startups in the Transportation industry shows that American entrepreneurs have responded to the logistical challenges of ecommerce and pandemic-era travel shocks with a new wave of ventures.”