Small Business Bankruptcy
Whether you or someone you know has filed for bankruptcy, either personally or professionally through a small business, bankruptcy in the United States may be more common than you think. The stigma attached to filing for individual bankruptcy or business bankruptcy is slowly fading away as more and more Americans take advantage of the process. Whether this means more trouble for the economy, or a sound way for individuals to get back on their feet, or both, there are some compelling statistics that shouldn’t be ignored.
In 2013 there were a little over 1 million bankruptcy filings in the United States. Of that million plus, just over 33,000 were business related filings. That’s only about 3% as opposed to the remaining 97% being nonbusiness filings.
According to the Small Business & Entrepreneurship Council there were almost 5.68 million employer firms in the United States in 2011. Of that, more than 5 million of these consisted of businesses with 20 or fewer employees. With almost 50,000 business related filings that year, nearly 1 in every 102 of these small businesses filed for bankruptcy.
According to an article that appeared in Bloomberg Businessweek: Small Business, businesses that filed for bankruptcy were only about 12% less likely to be approved for a new loan after filing.
The same article suggests that there are no significant differences between businesses that have filed in the past and businesses that have not. This includes size of the business, cash flow, and profitability.
Whether the current system gives small business owners an a good way to start over and rebuild their financial standings is not clear. What is clear, however, is that regardless of the situation, filing for bankruptcy in the United States is not necessarily a death sentence for a small business.
For more information on small business bankruptcy or small business liquidation please visit our website here. Or to learn more about the liquidation services offered by Ideal Trading Liquidation Company, please visit our website here.
Resources: http://www.sbecouncil.org/about-us/facts-and-data/ , http://www.uscourts.gov/Statistics/BankruptcyStatistics.aspx , http://www.businessweek.com/smallbiz/content/apr2011/sb20110415_076608.htm