While CNN Money recently placed California at the No. 2 spot on its list of the states with the highest startup activity, the Golden State has been less animated when it comes to the credit market, as it holds title to the highest small business bankruptcy rate in the country.
Of course, access to credit is not a direct correlation to bankruptcy, but the most recent Small Business Lending Index from Thomson Reuters and PayNet suggests that the credit recovery, both in California and nationwide, may continue to stall.
According to the report, borrowing by small firms grew 12 percent in March compared to the same period in 2010, but that figure is down from the 17 percent year-over-year growth noted in February.
"Small business balance sheets are pristine right now. There's a lot of potential out there (for growth), but we need to see the demand come back to ignite it," PayNet President and founder William Phelan told Reuters.
While little can rob California of its reputation for entrepreneurship, it remains to be seen how the slow credit market will impact entrepreneurs' decision to incorporate in California.
Tags : ca, financial management, incorporation news, small business management
Posted: May 3rd, 2011