- The number of business applications dropped 2.4% in February 2022 — the second straight year-over-year decline. 10,000 fewer business applications were filed in February 2022 than in February 2021. But that pales in comparison to the January 2021-to-January 2022 period, when 53,000 fewer business applications were filed, equaling an 11.0% drop.
- Despite the national rate falling, nine states saw business applications jump by double digits. New Mexico (24.8%), West Virginia (24.1%) and Delaware (24.1%) led the way. New Mexico saw double-digit year-over-year growth in January, too.
- On the flip side, seven states — mostly in the South — saw business applications fall double digits. The District of Columbia (18.7%), Georgia (18.2%) and Mississippi (15.1%) saw the steepest year-over-year declines.
- Many of these potential new businesses may be empty calories when it comes to the economy. Researchers earlier in the pandemic saw an uptick in business applications but smaller growth among what the U.S. Census Bureau calls high-propensity business applications, or HBAs. These are a subset of business applications with a high likelihood of the business transitioning into one with payroll. In February 2022, the year-over-year drop in the number of applications deemed high propensity was 4.4%, similar to the dip in business applications.
LendingTree researchers looked at the number of new business applications filed in each state in February 2022 compared to February 2021. To rank the states, researchers found the percentage change in business applications between the two periods.
Business applications — per 2021-2022 data from the U.S. Census Bureau — are defined as all applications for an Employer Identification Number (EIN), except for applications for tax liens, estates and trusts.
Researchers also looked at high-propensity business applications (HBAs), a subset of business applications with a high likelihood of the business transitioning into one with payroll.