The U.S. Census reported there were an estimated 2.52 million businesses that were majority-owned by veterans in 2012, which posted receipts of $1.1 trillion, employed more than more than 5 million and generated an annual payroll of $195 billion.

However, according to a 2017 study by the Institute for Veterans and Military Families at Syracuse University, the rate of vets starting a company has declined from 12.3% in 1996 to 5.6% among post 9-11 vets. Among World War II vets, 49% of them opened a business, the study noted.

PenFed's research also showed additional metro areas conducive for vets' businesses, ranking six through 10, included Washington, D.C., Houston, Boston, Atlanta and Austin, Texas.

What's more, the top emerging cities for veteran entrepreneurs included, Jacksonville, Fla., Denver, Kansas City, Mo., San Diego and Cincinnati, according to the PenFed Foundation.

The study ranked the metro areas based on key factors important to the success of veteran entrepreneurs such as the degree the city's metro area provides a foundation for veterans to access support and tools, the ability of the metro areas to foster new business development, as well as economic growth and amenities.

"A successful startup requires a lot of things, but one of the key factors is an ecosystem that supports new and growing businesses," Seda Goff, director of veteran entrepreneurship at PenFed Foundation, said. "Our hope is that this data will inform decision making and empower veteran entrepreneurs and communities to transform cities across America."

Goff, who also serves as City Leader for Bunker Labs and teaches entrepreneurship at American University in Washington, D.C., developed the PenFed research report in partnership with Edelman Intelligence.