Small Business Bankruptcies Continue to Fall
The number of small businesses going bankrupt dipped for the fifth straight quarter, according to credit-reporting service Equifax.
Bankruptcies across the nation declined more than 11 percent in the third quarter compared to a year earlier, continuing their slide from their peak in the second quarter of 2009. In total, they're down nearly 19 percent since then.
"For more than a year, we have seen a decline in the number of small business bankruptcies but this is the biggest percentage decrease during that period," said Reza Barazesh, a senior vice president at Equifax. "Small businesses are having a tough time. But the numbers are beginning to indicate that some of the stresses may be abating."
For its quarterly reports, Equifax analyzes Chapter 7, 11 and 13 filings as well as data on more than 24 million small businesses in the U.S. The company considers small businesses to be those with 100 or fewer employees.
The report follows a Discover Small Business Watch survey released earlier this week that showed small business optimism is increasing. A third report says that more than half of small firms expect to grow in the next year.
Payroll services firm ADP polled businesses with fewer than 50 employees. Though 80 percent said their companies had been "negatively impacted" by the economy, half expected business to pick up in the next year.
(Other tidbits from the survey: Sixty percent of small business executives use smartphones – and 77 percent say the mobile devices are mostly to aid with customer relations.)
Inc. contributing editor Courtney Rubin was for five years a London-based staff writer for People magazine. Rubin, a former senior writer for Washingtonian magazine, has written for the New York Times magazine, Time, Marie Claire, and other publications. She is the author of The Weight-Loss Diaries.