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LendingTree is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). LendingTree does not include all lenders, savings products, or loan options available in the marketplace.

Metros Where Entrepreneurship Boomed Amid the Coronavirus Crisis

Updated on:
Content was accurate at the time of publication.

Amid the beginning of the COVID-19 pandemic, the number of new U.S. business applications rose 25% between 2019 and 2020. To get a deeper understanding, LendingTree researchers examined the 100 metros with the most new business applications in 2020 to find the biggest — and smallest — year-over-year changes.

The findings showed that Memphis, Tenn., had the largest increase — 77.9% — in the number of business applications between 2019 and 2020. And only two of the metros examined had negative growth in this period.

Here’s what else researchers found.

Key findings

  • The number of people filing initial paperwork to start a business in the U.S. rose 25% between 2019 and 2020. While not everyone who filed would move forward to form a business, this indicates that a growing number of Americans were looking to start one.
  • Memphis, Tenn., saw the largest growth in business applications over the period analyzed. The Tennessee metro saw a 77.9% jump in the number of Americans who applied for business applications by seeking an employer identification number (EIN).
  • Among the 100 metros with the most business applications in 2020, only two saw negative growth compared to 2019. In Provo, Utah, and Boise, Idaho, business applications dropped 3.1% and 0.2%, respectively, in this period.
  • The biggest growth in business applications came in the retail trade sector. The analysis revealed a 59.7% growth in entrepreneurs seeking an EIN. At the other end, business applications for new mining businesses were down 21.3%.

Business applications up 25% in U.S.

According to data from the U.S. Census Bureau, the number of people filing the initial paperwork needed to start a business — which, in this case, is filing for an EIN — in the U.S. rose 25% from 2019 to 2020.

Keep in mind that some sole proprietors (think freelancers, financial planners and consultants) who don’t need to file for an EIN may not be reflected in the data. And not all the applications filed are guaranteed to progress into a business. For example, other steps may be necessary, like pitching investors, lining up suppliers or applying for a small business loan, which might keep some from turning their idea into a reality.

Another important factor is that the Census Bureau has some exclusions in its data. For example, the following aren’t included:

  • Applications without a state-county geocode
  • Applications from sectors with low transition rates, like agriculture, forestry, fishing and hunting
  • Applications from specific industries, like private households, civic and social organizations

So while these figures are an indicator of the growing interest in starting a business in the U.S., they aren’t a direct reflection of new business growth. Another LendingTree survey found that a quarter of Americans considered starting a small business during the pandemic, and 64% of those folks made moves toward doing so.

Taking a closer look at the national data, there was a clear spike in applications in June 2020 — just a few months after the onset of the pandemic — with the numbers remaining elevated the rest of the year.

Monthly business applications: 2019 vs. 2020
January 2019 277,317 January 2020 282,802
February 2019 298,253 February 2020 300,705
March 2019 300,259 March 2020 257,673
April 2019 292,614 April 2020 234,838
May 2019 285,547 May 2020 294,957
June 2019 290,506 June 2020 377,081
July 2019 282,573 July 2020 552,748
August 2019 292,273 August 2020 485,701
September 2019 292,756 September 2020 437,527
October 2019 299,023 October 2020 414,335
November 2019 293,781 November 2020 396,681
December 2019 309,607 December 2020 341,949
Source: U.S. Census Bureau

LendingTree chief credit analyst Matt Schulz says this spike in 2020 was likely a means for consumers to take control of their financial lives.

“The pandemic has created so much financial chaos for so many people, and that uncertainty surely spurred many Americans to take the plunge,” he says. “Some folks did it out of necessity because of income or job losses. Some folks did it to feel more secure, as the idea of relying on one source of income just didn’t make sense anymore for a lot of people. Others likely did it because they’d wanted to for years but never felt the time was right.”

If you’re interested in starting your own venture and need startup funds, LendingTree has compiled a list of options so that you can compare loans for your small business.

The government relief checks and shutdowns could also have enabled some folks to seek this option, too, Schulz says.

“It’s a whole lot easier to take a risk when you feel your safety net is strong,” he says.

Largest growth in business applications: Memphis, Tenn.

Memphis, Tenn., had the largest growth in business applications from 2019 to 2020, with a 77.9% jump in the number of Americans who applied for an EIN. According to the data, there were 14,938 business applications in 2019. But, in 2020, that number jumped to 26,572.

This jump in applications could have been in response to the stay-at-home order enforced by Memphis at the onset of the coronavirus outbreak. That order required residents to stay inside their homes as much as possible — including not going to work — unless they were considered essential workers.

Notably, Mobile, Ala., was the only other metro area where the number of EIN filings exceeded 70% during this period. The city also had a stay-at-home order that limited people’s ability to work in a traditional setting, starting in April 2020.

Top 10 business application growth, 2019 to 2020
No. 1 Memphis, TN No. 6 Atlanta, GA
No. 2 Mobile, AL No. 7 New Orleans, LA
No. 3 Shreveport, LA No. 8 Cleveland, OH
No. 4 Baton Rouge, LA No. 9 Savannah, GA
No. 5 Augusta, GA No. 10 Jackson, MS

Overall, the South seems to be a hotspot for potential business formation, as nine of the top 10 metros for growth in business applications from 2019 to 2020 were in the South. Only Cleveland, in the Midwest, broke that trend.

Only 2 metros with most applications saw negative growth

Of the 100 metros with the most business applications in 2020, only two — Provo, Utah (-3.1%) and Boise, Idaho (-0.2%) — saw a decrease compared to 2019.

Provo operated under a stay-at-home directive early in the pandemic but didn’t have a shelter-in-place order. That directed Utah residents to stay home as much as they could and work from home whenever possible. Businesses that remained open were also required to follow hygiene policies and enforce social distancing.

Keep in mind that while Provo is one of two areas where the numbers dropped year over year, it’s still one of the 100 metros that saw the most interest in starting a small business overall.

The COVID-19 restrictions in Boise resembled those in Provo. And Idaho residents were required to stay home as much as possible, and employers in nonessential services were also required to accommodate people working from home, starting at the end of March 2020.

Looking at the bottom 10 areas for business application growth, two more Utah metros made the list: Salt Lake City (1.3%) and Ogden-Clearfield (5.8%). In fact, six of the bottom 10 metros were in the West. There were also three metros from the Northeast.

Bottom 10 business application growth, 2019 to 2020
No. 1 Provo, UT No. 6 Portland, OR
No. 2 Boise, ID No. 7 Honolulu, HI
No. 3 Salt Lake City, UT No. 8 Ogden, UT
No. 4 Des Moines, IA No. 9 Boston, MA
No. 5 Albany, NY No. 10 Providence, RI

Full rankings by metro

Retail trade saw biggest industry growth amid coronavirus crisis

The retail trade sector (59.7%) had the biggest growth in business applications from 2019 to 2020. This didn’t surprise Schulz.

“So many companies have made it so easy to sell online that people feel good about taking the plunge,” he says. “Setting up an online store is generally simpler, quicker and less expensive than ever, so the barriers to entry that once scared potential entrepreneurs away from opening a new store aren’t the obstacles that they once were.”

Business applications change by industry, 2019 to 2020
Industry Change Industry Change
Retail trade 59.7% Educational services 16.5%
Transportation and warehousing 34.8% Utilities 16.1%
Other services 28.4% Finance and insurance 14.0%
Administrative and support 27.9% Manufacturing 12.6%
Wholesale trade 25.4% Arts and entertainment 8.9%
Information 24.8% Management of companies 7.2%
Agriculture 21.9% Construction 6.3%
Accomodation and food services 20.8% Real estate -5.7%
Health care and social assistance 19.6% Mining -21.3%
Professional services 17.0%
Source: U.S. Census Bureau

Interestingly, while e-commerce purchases peaked in April 2020, they still only accounted for about 19% of retail sales overall, according to data from the National Retail Federation. In fact, in-store purchases remained relatively stable after the first three months of the pandemic. This could have led prospective business owners to see the retail industry as a safe bet, even during turbulent times.

At the other end of the spectrum, business applications for new mining businesses decreased 21.3% over the observed period. Mining and real estate were the only two industries to see negative growth from 2019 to 2020. Both industries saw difficulties adjusting to the restrictions that came with the pandemic. For example, the U.S. mining industry lost about $1.5 billion in revenue in 2020 compared to 2019. Real estate also took a significant hit, particularly during April and May 2020, when sales resembled the 2007 and 2008 financial crisis levels.

What’s happening with business applications in 2021?

LendingTree focused on 2019 and 2020 because that was the latest available data from the U.S. Census Bureau on the metro level.

But researchers also pulled available national figures for 2021. Based on that data, one thing is clear: The upward trend of business applications has continued into 2021. In fact, nearly 600,000 more business applications have been filed in 2021 compared to the previous year, which doesn’t include how many will be filed in December.

Monthly business applications, 2021
January 2021 488,945
February 2021 427,256
March 2021 446,171
April 2021 495,621
May 2021 495,976
June 2021 446,039
July 2021 448,197
August 2021 428,523
September 2021 432,170
October 2021 432,305
November 2021 432,034
Source: U.S. Census Bureau; available through November 2021

The Census Bureau is also officially tracking projected business formations as of December 2021. According to their projections, there should be a 0.3% increase in business formations within the U.S. over the next four quarters. That amounts to more than 30,000 new businesses.

For those who decide to take the plunge, obstacles can make it difficult to take things beyond that first application. But with proper planning, like conducting market research, looking for recession- and pandemic-proof industries, and creating a viable business plan, as well as looking into small business loans that suit your needs, it can be done.

And Schulz suspects that the upward application trend, a signal of optimism in these difficult times, will continue into 2022.

“The pandemic is still very much in effect, and millions of people are reassessing the way they live their lives,” he says. “In doing so, many Americans are taking a chance and starting a new business, either as their main job or as a side hustle. I expect that will continue for some time.”


LendingTree researchers analyzed U.S. Census Bureau Business Formation Statistics data to find the 100 metros with the most business applications in 2020 — the latest available on the metro level. Analysts then compared the number of people who filed for EINs in each metro in 2019 and 2020. The metros were ranked from highest to lowest based on percentage change.