High-Propensity Business Applications: 148K (Jan 2026)
148K high-propensity business applications were filed in Jan 2026. These are the ones the Census Bureau flags as likely to become employer firms -- businesses with actual payroll, not just a tax ID.
High-Propensity Business Applications - Historical Chart
High-Propensity Business Applications. Gray shaded areas indicate U.S. recessions.
Source: Federal Reserve Bank of St. Louis (FRED), Series BAHBATOTALSAUS. Shaded areas = NBER recession dates. Updated 2026-03-09.
The Applications That Actually Matter
The Census Bureau separates business applications into two categories: total applications (anyone filing for an EIN) and "high-propensity" applications (those exhibiting characteristics that predict actual business formation with employees). The high-propensity filter looks for signals like planned wages, corporate entity type, and industry classification that historically correlate with creating real businesses.
At 148K, high-propensity applications are running well above the pre-COVID baseline of roughly 80-90K per month. But the growth rate is slower than total applications, and the ratio of high-propensity to total has been declining. In 2019, high-propensity apps represented about 35% of total applications. Today that share has dropped to roughly 28%, which means an increasing share of new business formation is happening in the low-barrier, low-survival-rate categories.
This distinction matters enormously. A high-propensity application that converts to an employer business creates, on average, 4-7 jobs within its first three years. It opens a commercial bank account, leases space, buys equipment, and generates recurring revenue. These are the businesses that become your customers, your competitors, and the backbone of local economies.
Where High-Propensity Formation Is Concentrated
The high-propensity surge has been strongest in:
- Professional services: Consulting, accounting, legal, and marketing firms started by former corporate employees
- Healthcare: Independent practices, home health agencies, and specialty clinics
- Construction: Subcontractors and specialty trades benefiting from infrastructure spending
- Technology services: Software development, IT consulting, and cybersecurity firms
Notably absent from the high-propensity surge: retail, food service, and personal services. Those categories are growing in total applications but not in the high-propensity subset, suggesting they are predominantly sole proprietorships and gig arrangements rather than employer businesses.
The Credit Market Implications
High-propensity businesses are the primary market for SBA loans, community bank lines of credit, and commercial real estate leases. When formation in this category runs hot, it creates demand for capital that the banking system must absorb. The question is whether lenders can distinguish between high-propensity applicants who will succeed (and repay) versus those who will not.
Historical data suggests that even within the high-propensity category, 40-50% of businesses do not survive past five years. The conversion rate from high-propensity application to sustained employer business is meaningful but far from guaranteed. Lenders who extend credit to Year 1 businesses based solely on the "high-propensity" classification are taking more risk than the label implies.
The 10-year average is 130K monthly high-propensity applications. At 148K, the current level is above average by 18K. The peak was 185K in Jul 2020.
For Business Owners
If your competitors are multiplying, this data explains why. High-propensity formation running 50%+ above pre-pandemic levels means more businesses entering every market. Margins are being competed away. Customer acquisition costs are rising. And the businesses that survive this Darwinian gauntlet will be formidable competitors. Plan for a more competitive landscape, not a temporary surge that fades. The formation boom is structural, not cyclical.
The Conversion Funnel by Industry
Not all high-propensity applications are created equal. The conversion rate from application to actual employer business varies dramatically by sector. Professional services (consulting, accounting, legal) convert at roughly 40-45% -- these are experienced professionals who have clients lined up before they file. Technology companies convert at 30-35%. Retail and food service convert at 15-20% -- low barriers to entry mean high barriers to survival.
The sectoral mix of high-propensity applications has shifted post-COVID. Professional services and healthcare have grown their share, while retail and food service have declined. This is a positive signal for the overall quality of new business formation. But it also means that job creation may be slower than the headline suggests, because professional services firms tend to start with fewer employees.
For lenders, the sectoral breakdown should inform credit decisions on startup loans. A high-propensity application from a healthcare professional starting an independent practice has very different risk characteristics than one from a first-time restaurant entrepreneur. The Census Bureau's high-propensity flag is a useful first screen, but the industry classification within that flag is where the real signal lives.
The current elevated level represents a structural break from historical norms. Whether it persists depends on two factors: the continued availability of remote work (which enables professional services startups) and the pipeline of corporate layoffs (which pushes skilled workers into entrepreneurship). Both factors appear durable through at least 2027, suggesting that high-propensity formation will remain well above the pre-pandemic baseline for the foreseeable future.
High-Propensity vs. Total Applications
| Measure | Current | Pre-COVID Avg | Change |
|---|---|---|---|
| Total Applications | 532K | ~250K | +113% |
| High-Propensity | 148K | ~85K | +74% |
| High-Propensity Share | 28% | ~35% | -7pp |
High Propensity Business Applications - Frequently Asked Questions
The Census Bureau uses a predictive model that flags applications with characteristics associated with employer businesses: planned wages dates, corporate or partnership legal structure, and non-residential addresses. About 30-40% of total applications meet these criteria.
The current reading is {value} for {period}. Pre-pandemic, the monthly average was roughly 100,000-120,000. Post-2020, the average has run closer to 140,000-180,000, though month-to-month variation is significant.
The Census Bureau estimates that roughly 50% of high-propensity applications result in a business with payroll employees within two years, compared to only 20-25% for all applications. The filter roughly doubles the conversion rate.
Both. Total applications surged partly due to gig workers and online resellers filing EINs. But the high-propensity subset also jumped significantly, which confirms that a meaningful share of new formations are real employer businesses with growth potential.
SBA 7(a) and 504 loan volumes tend to follow high-propensity applications with a 12-18 month lag. New employer businesses need capital for buildout, inventory, and hiring, and SBA-guaranteed loans are the primary vehicle for sub-$5M business lending.
FRED series BAHBATOTALSAUS, sourced from the Census Bureau's Business Formation Statistics program. The underlying data comes from IRS EIN applications filtered through a Census predictive model. Monthly, seasonally adjusted.
Related Data & Guides
Data sourced from the Federal Reserve Economic Data (FRED) maintained by the Federal Reserve Bank of St. Louis. Updated monthly when new data is released.