Are American businesses on life support? New debt data reveals troubling trend

Are American businesses on life support? New debt data reveals troubling trend

If you own a business in these 10 states, you’re likely drowning in debt

• Businesses in Georgia are struggling to survive the most, as they have the highest loan rate of any state at an average of $795,216.
• Texas and California also place in the top three at $770,887 and $765,968.
• Maine has the lowest loan amount on average at $272,290.

A new study reports that Georgia businesses have the highest debt of any state, borrowing $795,216 per loan on average.

The analysis by franchise consultants Franchise Opportunities examined Small Business Administration (SBA) loan records from 2021 to the most recently released data in 2024. The data was then assessed to determine the average loan value granted to businesses in each state, as well as the number of loans approved from 2021 to 2024. States were then ranked from the highest loan value to the lowest to determine where businesses are struggling to survive the most.

Rank	State	Average loan value per business	Total number of loans approved between 2021 and 2024
1	Georgia	$795,216.04	8,099
2	Texas	$770,887.49	18,920
3	California	$765,968.82	31,610
4	Alaska	$725,285.63	522
5	North Carolina	$722,981.38	5,596
6	Arizona	$699,343.60	5,293
7	Louisiana	$663,950.26	1,852
8	Nevada	$647,991.11	2,801
9	Alabama	$637,609.96	2,141
10	Utah	$630,412.77	4,972

Businesses in Georgia had the largest business loans recorded across America between 2021 and 2024. Businesses borrowed an average of $795,216.04 and there were a total of 8,099 loans approved from 2021 and 2024. This means that businesses in Georgia collectively piled up more than $6.4 billion in loan debt. 

Texas ranks as the state with the second highest average loan value for businesses at $770,887.49. Between 2021 and 2024, a total of 18,920 loans were approved, meaning the combined business loan value in Texas reached $14.5 billion, showing just how much businesses in Texas are struggling.

The average loan for California businesses hit $765,968, placing the Golden State third highest nationwide. California led all states in both total approvals at 31,610 and total loan value at $24.2 billion. These numbers match California’s position as America’s economic powerhouse with its huge consumer market and concentration of growth industries needing constant cash injections.

Alaska companies borrowed an average of $725,285 each. This was enough for fourth place despite having the second-lowest approval count at just 522 loans total. The northern state’s businesses still secured $378.5 million in combined funding, suggesting those firms that do borrow are shouldering massive commitments compared to the state’s tiny population.

North Carolina companies took fifth spot with average loans of $722,981. In the state, 5,596 loans worth more than $4 billion combined were approved.

Arizona ranked sixth with borrowing at $699,343 per loan on average. In this state, 5,293 loans totaling more than $3.7 billion were approved, as companies sought money to handle tough economic conditions.

Louisiana ranked seventh. In the state, companies borrowed an average of $663,950. Despite approving just 1,852 loans throughout the study period, Gulf Coast businesses collectively took on more than $1.2 billion in debt.

Nevada secured eighth position with businesses borrowing $647,991 on average per loan. A total of 2,801 loans worth a combined $1.8 billion were approved in this state.

Alabama and Utah completed the top ten with average business loans of $637,609 and $630,412 respectively. Both states showed substantial borrowing compared to their population sizes. Alabama companies secured $1.37 billion across 2,141 loans while Utah businesses took on $3.13 billion through 4,972 approvals. These figures show widespread reliance on significant SBA financing across these diverse regional economies at a time when access to capital remains crucial for business survival and growth.

Commenting on the study, Thomas Jepsen, CEO of Franchise Opportunities said the following:

“For any business that wants not just succeed but grow and turn into a franchise, loans can be a challenging thing to navigate. While it may be the injection of finances that can help businesses go to the next level and expand, it can equal become a burden and become one very quickly which can lead to financial insecurity. 

If you’re considering a loan, firslty, make sure that you know exactly what the funds will be used towards and the ROI on these. If you’re applying for a loan just to make ends meet, you must make sure that you know exactly how you plan to use the money to turn your business around. If you’re using it to grow further despite being financially stable and even profitable, then make sure that every dollar is going towards a function in your business that will make it even stronger and even more profitable.”

The study was conducted by Franchise Opportunities, run by Thomas Jepsen, who helps aspiring business owners find the perfect franchise match – like a dating app, but instead of swiping left on “likes long walks on the beach,” we’re swiping left on “90-page contracts with vague royalty clauses.” Franchise Opportunities is there to help business owners navigate the world of franchising without accidentally signing your life away to a frozen yogurt kiosk in a mall that closed in 2007.