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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 4^th 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. 

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. 

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.