Six Best Industries to Start a Business
LEXINGTON — What industries, franchised or not, have the highest percentages of small businesses that are able to pay back their loans? Psychiatric services, veterinarian services, physician services, dental services and even breweries are among the top industries in loan payback rates according to the latest Small Business Administration performance report, covering the period of October 1, 2000 through September 30, 2009. No surprise there. But what about the rest of us who aren't doctors, dentists or highly trained specialists?
There are a few industries that include franchises that are ranked among the top:
- Bottled gas dealers
- Hotels and motels
- Funeral homes
- RV parks & campgrounds
- Drugstores
- Home health care services
The SBA report identifies hotels, drugstores, home health care and gas dealers as some of the best businesses from the standpoint of loan payback rates. Although not shown in the chart, honorable mention should be given to the ever-expanding pet care services, which has a 10.78 percent failure rate. Gas stations with convenience stores aren't doing too shabbily either, with only 13.84 percent of their borrowers not having sufficient cash flow and assets to pay back their loans.
The SBA provides the report to loan officers of its most trusted lenders and banks throughout the country. The loans are guaranteed to be paid back to the lenders by the SBA.
The chart explained
The lower the failure rate the better
The bar chart above is a collection of data from lenders on their borrowers' repayment of general SBA 7(a) and real estate and equipment 504 loans. Chart categories were sorted by North American Industry Classification System (NAICS) industry codes, used by companies to group businesses by economic activity type. As an example, franchising is an industry, assigned NAICS code 533110.
All industries with 100 or fewer loan disbursements have been filtered out from inclusion in the chart. Also, only industries known to include franchises are shown.
SBA loan failure rate spreadsheet
Click the headings of the table below to sort by that subject in ascending or descending order.
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