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 An earlier version of this article misstated the founding date and had out-of-date pricing information for the vehicle.