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Small Business Failures Declining

An Equifax report shows small business bankruptcies on the wane.


Small business failures are on the decline, a new report finds--and are expected to continue falling.

In an analysis of bankruptcy trends across the nation, Equifax found that small business bankruptcies declined 36% from the first quarter of 2010 to the first quarter of 2012. The report also projected the decline would continue.

The decrease in bankruptcies points to continued stabilization among small businesses--defined for this report as having fewer than 100 employees.

In the study's release, Equifax spokesperson Rissi Lovern said the declining number of bankruptcies “... is due largely to the belt tightening of business owners, as well as increasing consumer confidence and spending.”

There were some regional variations, with Western states had the highest number of small business bankruptcies, although a couple of California metro areas also showed the greatest declines. The Sacramento area had the largest year-over-year drop in bankruptcies in the first quarter of 2012, with a 42.5% drop in filings; a Southern California region that includes Riverside and San Bernardino showed a 41.27% decrease over the same period.

Equifax also published a full list of small business bankruptcy filings by metro area. 

Last updated: Jun 28, 2012

CAITLIN BERENS writes about business innovation and entrepreneurs. Before Inc., she worked at Billboard, SELF, and Better Homes and Gardens. She attended Drake University, and lives in Brooklyn, New York.

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