Cities leading the way in loans to American entrepreneurs

You don't have to say you're the "Airbnb meets Uber of …" to get your good business idea funded.

Credit, not venture equity, is the most important form of capital for most entrepreneurs. Ninety-nine percent of small businesses will never have access to VC equity, said Rohit Arora, CEO of Biz2Credit, a New York City-based online platform that matches small-business borrowers and lenders. For many start-ups, VC money wouldn't even make sense. "There are millions of start-ups and a few thousand that get venture capital," Arora said.

But there is a select list of cities around the United States where access to credit is among the country's best, and that can be a difference maker for entrepreneurs looking to fund a new business or take their current business to the next level.

To compile this exclusive CNBC ranking, Biz2Credit reviewed 261 metro areas across America to find the top 25 when it comes to accessing credit (the ranking is based on the total dollar value of business loan applications approved, not solely the number of individual applications).

Even when it comes to debt, Silicon Valley came out on top. The San Jose-Sunnyvale-Santa Clara, California, region — home to firms such as Google and Facebook and famous venture capital firms like Andreessen Horowitz and Khosla Ventures — tops the list of CNBC's top 25 metro areas for access to credit.

Here's where it gets interesting. After the obvious Silicon Valley pole position, other regions that scored high on access to credit were Orlando-Kissimmee-Sanford, Florida, in second place; Indianapolis-Carmel-Anderson, Indiana, and Philadelphia-Camden, New Jersey and Wilmington, Delaware, tied for third place; and Houston-The Woodlands-Sugar Land, Texas, in fourth place.

Source: Biz2Credit

Since the recession, many small-business owners have found banks less willing to lend; some have turned to other sources, such as private investors known as angels, and alternative financing. But for small business, getting loans approved is a big deal.

"Banks have kind of retrenched," said Rocco Totino, partner in the New York City office of the accounting firm Grassi & Co. "Small business seems to be a little bit more vulnerable to the lack of access to capital. They need it to grow the existing business, to expand into other areas and to pay expenses during periods of growth and of slowdown. They also need it to purchase inventory and replace equipment."

Even when banks are lending, not all business owners qualify for a loan. "There are dozens of new alternative lenders popping up, but at the end of the day, credit still holds most of them back," said Levi King, co-founder and CEO of Nav, a website based in San Mateo, California, that helps small-business owners improve their credit and matches them with loans.

"All of the capital in the world can be available, but if you are not qualified for it, you are not going to get your hands on it," said King.

Totino said banks now require a great deal more collateral and frequent financial reporting for small-business owners. Banks used to require annual updates on borrowers' debt-to-equity ratio; some now ask for data quarterly or every six months, he said.

Arora said it's not just the tech effect that helped the Silicon Valley area land the top spot when it comes to credit access. The region is part of the largest state in the country, with the healthy economy creating a strong foundation for access to capital. "There are many federal contracts that have gone to companies in that area," he said.

Access to capital in the Orlando area, specifically, benefits from Florida's business-friendly, low-cost environment, according to Arora.

In Indianapolis, businesses in the thriving logistics and transportation industry have healthy access to capital, contributing to the region's high ranking on the list. "It was not really impacted by the recession as deeply as other parts of the country," Arora said.

At the same time, money has been flowing to entrepreneurs in Philadelphia and the Wilmington area as a result of the rejuvenation of the city's downtown and growth of the state's oil industry. It doesn't hurt that Wilmington has a strong financial services industry, as well. "It's a very unique combination of old-school and new-school industries," Arora said.

Meanwhile, Houston has become more of an IT hub, which has led to an influx of capital into local start-ups. "Houston has old money, oil money. … A lot of its companies — even oil companies — are investing a lot more in technology," Arora said.

Even in these cities where access to credit is better than most metro areas across the United States, other forms of business financing are becoming more important.

Anthem Blanchard recently moved his company, 20-person online gold and silver retailer Anthem Vault, from Las Vegas to Austin, Texas, which was No. 1 overall in the CNBC Metro 20: America's Best Places to Start a Business ranking. He is currently raising capital locally in places such as Houston. "I am hard-focused on it right now," said Blanchard, the firm's CEO, whose shareholders and board are mostly in Texas. "They tend to be east of here, in Houston."

Small businesses are less confined to traditional sources of locally based capital. Elio Motors — a company that makes a three-wheel enclosed vehicle which is currently on offer at a retail price of $7,300 and hit speeds up to 84 MPG — is based in Detroit, which is No. 10 among the top 25 cities for access to credit.

The start-up, founded in 2009, raised nearly $17 million from about 6,600 unique investors across the country in a round that closed in February on StartEngine, an equity crowdfunding platform based in distant Santa Monica, California. The money will enable roughly 25-employee Elio Motors to build working prototypes for safety testing, said Ron Miller, CEO of StartEngine.

Miller hopes to attract more start-ups. "We felt we could help revive the American dream by democratizing the access to capital that previously had been limited to a very small set of white males, primarily Silicon Valley residents," Miller said.

When Jonathan Opdyke, CEO and co-founder of 12-year-old New York City-based HookLogic, needed to raise capital, he turned to Fung Capital, headquartered in Silicon Valley, as well as Bain Capital Ventures in Boston. HookLogic, which sells advertising within e-commerce sites such as Expedia, came away with $15.5 million in 2015.

"There's no question the biggest money is going to be in Silicon Valley," Opdyke said. In an earlier round, HookLogic raised $14.5 million from Intel Capital, also in Silicon Valley.

That's just not the money most small businesses will ever see — or be focused on — in seeking capital for their business.

— By Elaine Pofeldt, special to CNBC.com

Correction: Elio Motors was founded in 2009 and its car is currently priced at $7,300 on its website. An earlier version of this article misstated the founding date and had out-of-date pricing information for the vehicle.