Posted on 12/21/2009 9:54:42 PM PST by Steelfish
Small Business Bankruptcies Rise 81% In State With credit tight and consumers still pinching their pennies, many business owners find they can't go on.
By Nathan Olivarez-Giles December 21, 2009
The Obama administration's new plan to give a boost to small businesses reflects continued trouble in that sector, which is facing new failures even as much of the nation's economy is stabilizing.
As credit lines have shrunk and consumers have cut back on spending, thousands of small businesses have closed their doors over the last year. The plight of struggling firms has been aggravated by the reluctance of banks to lend money, said Brian Headd, an economist at the Small Business Administration's office of advocacy.
"While bankruptcies are up, overall, small business closures are up even more," Headd said.
California has been particularly hard hit. The latest data show small-business bankruptcies up 81% in the state for the 12 months ending Sept. 30, compared with the previous year. Filings nationwide were up 44%, according to the credit analysis firm Equifax Inc.
The actual number of small businesses in trouble is probably higher, experts said, because many owners file for personal bankruptcy rather than seek protection for the business.
Dennis McGoldrick, a bankruptcy lawyer in Torrance, said his clients are all stuck in similar situations -- capital is hard to come by, customers are tough to attract and debt is piling up.
"We can't keep up," McGoldrick said. "There's more people that want to come in every day than I can see."
Cecily McAlpine, who filed for bankruptcy protection for her Cold Stone Creamery franchise last spring, said the experience was humiliating, but she had no choice.
(Excerpt) Read more at latimes.com ...
Obama’s plan is certainly working.
Welcome to Obamaland - CA had a head start.
How can small businesses compete at the Loan window when Uncle Sam is hogging all the space?
Arnold thinks ObaMao is #1.
Look at the results.
U.S. President Barack Obama (R) and Treasury Secretary Timothy Geithner meet with CEOs of several small and community banks in the Roosevelt Room at the White House in Washington December 22, 2009. REUTERS/Jim Young (UNITED STATES - Tags: POLITICS BUSINESS)
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