Posted on 04/06/2023 9:36:18 AM PDT by SeekAndFind
Small businesses across the United States are experiencing a surge in bankruptcies, surpassing levels not seen since 2020. According to a UBS note reviewed by The Epoch Times, conditions could become worse as the knock-on effects from the recent banking crises begin to manifest.
A person holds a sign advertising a sale at Century 21, a retail outlet that announced it was filing for bankruptcy and closing its stores due to the economic impact of the COVID pandemic, in New York City, on Sept. 26, 2020. (Andrew Kelly/File/Reuters)
The note from UBS Evidence Lab shows private bankruptcy filings in 2023 have exceeded the highest point recorded during the early stages of the COVID pandemic by a considerable amount. The four-week moving average for private filings in late February was 73 percent higher than in June 2020.
“[We] believe one of the more underappreciated signs of distress in U.S. corporate credit is already emanating from the small- and mid-size enterprises sector,” Matthew Mish, head of credit strategy at UBS, wrote in a recently published research note. “[The] smallest of firms [are] facing the most severe pressure from rising rates, persistent inflation and slowing growth.”
Industries hit hardest by the wave of bankruptcies include real estate, health care, chemicals, and retail outlets, according to the Swiss Bank’s report.
The Federal Reserve’s monetary tightening to combat inflationary pressures has been largely behind the uptick in bankruptcies. UBS indicated that the fear of a credit crunch has further worsened the rise in defaults.
Credit conditions are tightening across the spectrum. Large businesses and individual borrowers are feeling the heat as well.
As of February 2023, the monthly bankruptcy filings exceeded 31,000, an 18 percent rise from the 25,564 bankruptcy filings reported in February 2022, according to data provided by the American Bankruptcy Institute. The increase in Chapter 11 bankruptcies—typically used by larger businesses—rose by 83 percent over the same period, with 373 total filings in February of this year.
The White House has downplayed the current economic challenges and their impact on small businesses. Last week, for example, President Joe Biden cited higher rates of new business formation over the past three years—without acknowledging the issues entrepreneurs face.
“When I came into office, this economy was reeling. Small businesses were hurting. Literally hundreds of thousands of small businesses had closed across the country. Millions of Americans, many of whom worked in small businesses, lost their jobs through no fault of their own,” he said. “To jumpstart American economic recovery, we needed to help the small businesses, and we needed to help them fast. So we got to work.”
The president claimed that the American Rescue Plan Act of 2021 helped the economy by providing emergency loans to millions of businesses.
Still, the administration is set to raise the corporate income tax to 28 percent sometime in the coming months. The tax hike will affect small businesses at a time when credit conditions continue to tighten.
If you enlarge the sign it says “Century 21 Department Store”.
Must be some kind of new fangled real estate department store.
That makes more sense.
You never would know looking at the stock markets. Serious disconnect.
Just another Biden success story.
Yeah, prolly giving out ninj mortgages too!
That would explain it.
Not a surprise. As a small business owner I anticipated national results when I had to start paying back my Covid Loans to the SBA. Millions of other’s are doing likewise. Won’t be no loan forgiveness coming from Washington for the two years they had us shut down. Businesses take loans and invest in the future, but those loans are for the past. The logical thing to do is just go out of business and reform. You can’t compete with some who doesn’t have those loans.
They’re a realtor.
The cheat is baked in. They will only allow calculated opposition.
BidenDepression 2023
(Just another Biden success story.)
Just another day in the Joe Biden administration
The destruction of America continues
Just as a sign of the times.
There was a huge LA Fitness not far from me. It was in a plaza next to a large Walmart. So you figure they should do OK.
This LA Fitness closed last year. When I was by there last week a huge closeout store had replaced it. With tables heaped up mainly with super bargain priced new clothing. Shoes too. All heaped up on tables. All items 3 for 10 dollars. These all must have come from failed stores.
I walked in and looked around. I did buy a pair of sneakers for $8.
Many prices are going down. My sister (and husband) loves Arm and Hammer maximum strength baking soda toothpaste
https://www.amazon.com/dp/B00IFE675U?psc=1&ref=ppx_yo2ov_dt_b_product_details
This week at Amazon, they are 12 tubes for $43. Last year when she bought. The price was $47
Most voters will be focused on PC stuff.
The ones worried about the economy are not going to be upset about bankruptcies. We are past the socialist horizon
Getting out before what’s ahead?
I can’t think of one single thing this chomo has done to help “small” businesses. He has done EVERYTHING to hurt small businesses. Inflation, regulations, high taxes, more regulations, eliminating domestic energy production, cancelling mining... On and on. EVERYTHING he does hurts small business for the benefit of his corporate cronies.
That might be the effects of continuing consolidation.
Walmart and Amazon can both sell cheap because they get bulk discounts from manufacturers. Another reason small businesses can't compete.
Kind of a poor choice of photo by The Epoch Times...this “Century 21” was a chain of department stores that closed/went bankrupt due to the pandemic lockdowns in 2020:
https://www.cnn.com/2020/09/10/business/century-21-bankruptcy-closing/index.html
https://www.thestreet.com/investing/century-21-stores-of-ny-files-chapter-11-and-will-wind-down
And now they are re-opening (really poor choice of photos Epoch Times!):
https://www.cnn.com/2022/05/17/business/century-21-reopening/index.html
Nope.
The entire 2025 election story will be about the “racist removal of the black Tennessee legislators.” The eneMedia will dutifully require ALL Republicans to weigh in and to denounce the treatment of the Justins. Advertising will accuse every Republican of racism because the white Karen legislator was saved.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.