Main Street Monday — California Boasts the Lowest 1st-Year Small Business Failure Rate

May 5, 2025

Bob Coleman
Founder & Publisher

Main Street Monday — California Boasts the Lowest 1st-Year Small Business Failure Rate

Last week, I reported on challenges lenders may face in California within an increasingly regulatory environment. Today, I’m taking a positive approach by sharing statistics, which you know I love,  about the fifth largest economy in the world.

The first takeaway isn’t really a statistic but more of an observation from last week’s Community Advantage SBLC Executive Lender Summit: 

California is experiencing rising commercial and residential real estate property values at a greater pace than the national average. This equity solves many loan default problems.

Now, let’s dive into the statistics:

– California has 4.2 million small businesses, the most of any state.
– California boasts the lowest first-year small business failure rate in the country.
– California is the top state in the country for manufacturing businesses and jobs.
– California small businesses export $75 billion annually, making up 43% of all California exports.
– 98% of California small businesses have fewer than 20 employees.
– 7 million jobs have been created by California small businesses.
– 44% of California small businesses are women-owned, and 4% are veteran-owned.
– 25% of California small businesses are Hispanic-owned, and 7% are Black-owned.

Source: CalOSBA