The Baton Rouge metro area saw a 58.6% increase in the number of new business applications in 2020, the fourth-biggest increase in the nation, according to Lending Tree, a company that helps loan seekers compare potential lenders.
The number of people filing initial paperwork to start a business grew 25% nationwide, though not everyone who filed a business application will go on to launch a business. According to the Baton Rouge Area Chamber, the increase from 11,055 applications in 2019 to 17,535 last year was spread across the Capital Region, with six parishes ranking among the top 10% nationally.
The federal government’s breakdown of types of businesses for the same period is not yet available, though in this region small businesses serving the industrial and construction industries likely are significant drivers of the increase, says Andrew Fitzgerald, BRAC’s senior vice president of business intelligence. He suggests that during the pandemic, jobs at established companies may have seemed less secure than in the past.
“There’s no reason not to go out on your own if every business is a risk,” he says, adding that government stimulus and relief payments during the pandemic may also have played a role. “It’s easier to take risks when there’s sort of a government backstop behind you.”
The Shreveport area saw the third-highest increase at 58.7%, while New Orleans was seventh at 55.6%, the study indicates. Memphis, Tenn., had the biggest increase at 77.9%.