Best and Worst Areas for Small Business Bankruptcies

Bankruptcy filings by small businesses in the U.S. have dropped sharply in some areas, but have actually risen in others according to a new study of bankruptcy trends among the nation’s 24 million small businesses conducted by Equifax, one of the major credit reporting agencies. While bankruptcy rates have slowed in many regions, California remains troubled, accounting for nearly 20% of the country’s business failures. 

The Equifax study traced small biz bankruptcy trends by metropolitan statistical area (MSA). While bankruptcies accelerated in some areas, 10 of the top 15 MSAs with the greatest number of small business bankruptcies in 2010’s 4th quarter saw a year-over-year drop from a year earlier. The Chicago-Naperville area scored the best improvement — a 30% drop in bankruptcies. Following behind were a number of California MSAs, many of which reported double-digit decreases. 

But five top MSAs saw bankruptcies rise. One surprising result involved Wisconsin, which saw a 16.5% jump in small business bankruptcies – more than any other MSA on the top 15 list below. 

Despite improvements in some areas, California ranks as America’s bankruptcy capital. Six California metro areas made the list of top 15 MSAs with the highest number of small business bankruptcies. And all California MSAs combined (22 total) accounted for nearly a quarter of U.S. small business bankruptcy filings over the past year. 

MSA Q4 ‘09 Q4 ‘10 % Change 
Los Angeles-Long Beach -Glendale, CA 1082123013.68%
Riverside-San Bernardino -Ontario, CA 705642-8.94%
Houston-Sugar Land-Baytown, TX 4114458.27%
Sacramento-Arden-Arcade –Roseville, CA 533424-20.45%
San Diego-Carlsbad-San Marcos CA 438389-11.19%
Denver-Aurora, CO   463368-20.52%
Santa Ana-Anaheim-Irvine, CA   410365-10.98%
Portland-Vancouver-Beaverton, OR-WA 407333-18.18%
Dallas-Plano-Irving, TX 367327-10.90%
California – Rest of State 352300-14.77%
Oakland-Fremont-Hayward, CA 293286   -2.39%
Wisconsin-Rest of State 23627516.52%
New York-White Plains-Wayne, NY-NJ 2702720.74%
San Jose-Sunnyvale-Santa Clara CA 2482667.26%
Chicago-Naperville-Joliet, IL 375262-30.13%
Total 65906184-6.16%

Despite improvements in some areas, California ranks as America’s bankruptcy capital. Six California metro areas made the list of top 15 MSAs with the highest number of small business bankruptcies. And all California MSAs combined (22 total) accounted for nearly a quarter of U.S. small business bankruptcy filings over the past year. 

 

 

 
 
 

 

 

MSA Group Q4 ‘09 Q4 ‘10 
Total Bankruptcies – CA MSAs in Top 15 4,0163,902
Total U.S. Bankruptcies – All MSAs 23,31919,616
CA MSAs in Top 15 as % of All US Bankruptcies 17.41%19.89%

The study also named 15 metro areas with the fewest small business bankruptcy filings in the fourth quarter of 2010 — all reporting 9 bankruptcies or less.    

MSA Total Q4 ‘09 Total Q3 ‘10 Total Q4 ‘10 
Kingsport-Bristol, TN-VA 1869
Baton Rouge, LA 18179
Erie, PA 16249
Gulfport-Biloxi MS 10139
Amarillo, TX 1758
Charleston, WV 968
Killeen-Temple-Fort Hood TX 20237
Binghamton, NY 16137
South Bend-Mishawaka, IN-MI 1876
Trenton-Ewing, NJ 1276
Shreveport-Bossier City, LA 976
Lafeyette, LA 7115
Gainesville, Fl. 685
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Filed Under: LegalTrendsTroubleshooter

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About the Author: Daniel Kehrer, Founder and Chief Content Officer of BizBest Media, is a senior-level leader in digital media, content development and online marketing with special expertise in startups, SMB, social media and generating traffic, engagement and leads. He holds an MBA from UCLA/Anderson and is a passionate entrepreneur (started 4 businesses), syndicated columnist, blogger, thought leader and author of 7 business and financial books.

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