- Florida has been named the best state to start a small business in a study by Capital on Tap, thanks to its corporate tax rate of 5.5% and job creation through startups.
- Small businesses in Florida make up 99.8 percent of all businesses in the state, and employ 41.1 percent of its workers, as well as playing a crucial role in the state’s export industry.
- Florida received $488.4m from the US Treasury under the State Small Business Credit Initiative in 2022 and offers a collateral support program to financial institutions.
In a new study conducted by Capital on Tap, Florida was named the best state to start a small business, with the credit lender pointing to the state’s 5.5 percent corporate tax rate and an abundance of jobs created through startup companies.
Small businesses are a significant contributor to Florida’s economy, representing 99.8 percent of all businesses in the state, according to the Florida Small Business Association. These small businesses are responsible for providing employment opportunities to a significant portion of the state’s workforce, with 41.1 percent of Florida employees working for small businesses.
Furthermore, small businesses play a crucial role in driving Florida’s export industry, with 94.6 percent of the state’s exporters being small or medium-sized businesses. The state’s 3.6 million small business employees are an essential part of Florida’s economy, and their contributions are vital for sustaining the growth and success of the state’s business landscape.
The study took into account eight main factors, including the number of entrepreneurs, job creation, company survival rates, number of new employer businesses, corporate tax rate, labor costs/median wage, and average small business loan per employee. These factors were ranked, combined, and then weighted based on their importance to starting a business.
Late last year, Florida received $488.4 million from the U.S. Treasury under the State Small Business Credit Initiative (SSBCI). Through the SSBCI funding, the state will operate five programs: a collateral support program, a loan participation program, a loan guarantee program, an equity/venture capital program, and a capital access program.
The Treasury disclosed that Florida allocated $250 million to the collateral support program, which works to provide cash collateral accounts to financial institutions in order to enhance the collateral coverage of borrowers.
The program is modeled on a state-sponsored Small Business Administration 504 bridge loan program, which has operated since 2017.
The Motley Fool rated Florida as the third-best state in the country for small businesses in 2022, lauding its attractive tax climate. Only some business structures must pay state income taxes in Florida, such as C corporations. However, if a business owner sets up their entity as an LLC, sole proprietor, or S corporation, they are exempt from income tax.