West Coast Hit Hardest, Followed by Cities in Texas, Illinois, Western Region
Commercial bankruptcies nearly doubled in March 2009 from March 2008 among the nation’s more than 25 million small businesses, according to Equifax, Inc. (NYSE:EFX) analysis of its comprehensive database of small business information. Economically hard-hit areas in California, Texas and the Western part of the U.S. are at the top of the list, according to the research. A small business is defined as a commercial entity of less than 100 employees.
Los Angeles, Riverside/San Bernardino and Sacramento metropolitan areas led the nation in small-business bankruptcy filings in March 2009, based on Equifax’s data. Rounding out the top 15 metro areas:
Dallas – Plano-Irving, TX
San Diego – Carlsbad, CA
Portland-Vancouver –Beaverton, OR-WA
Atlanta-Sandy Springs-Marietta, GA
Houston-Sugar Land-Baytown, TX
Oregon – (excluding the Portland MSA)
California – (excluding previously mentioned MSA’s)
There was some dramatic increases year-over-year in commercial bankruptcy filings in a number of MSA’s. The Chicago MSA increased to 199 bankruptcies from 67 in March 2008; Dallas increased to 162 from 73; Portland to 145 from 65 and Denver 157 from 58.
For its research, Equifax reviewed and analyzed small business data for the month of March, the most recent month for which complete data is available, and compared it with results from March 2008.
“The March numbers provide a snapshot of what’s been happening to the small business sector during this period of economic turmoil,” said Dr. Reza Barazesh head of Equifax’s North American Commercial Analytical Services Group. “Not surprisingly, the highest number of small-business bankruptcies are in those parts of the country where home prices have decreased dramatically, unemployment has increased significantly, and credit has become tighter.”
While there appears to be a direct correlation between bankruptcies and the cities and regions most impacted by the economy, Dr. Barazesh noted that the metro areas with the fewest small-business bankruptcy filings remain scattered nationwide, with Charleston, W. Va., Columbus, Ga., Norwich, Conn., and the state of Hawaii, having the fewest number of filings in March 2009. Other cities (the bottom 15) with the fewest small business bankruptcy filings include:
South Bend/Mishawaka, Ind./Mich.
Cedar Rapids, Iowa
Davenport-Moline-Rock Island, Iowa
For the analysis, Equifax analyzed both Chapter 7 and Chapter 13 filings. Chapter 7 is a liquidation proceeding in which a debtor receives a discharge of all debts, while Chapter 13 is a reorganization bankruptcy enabling filers to pay off debt over a set period of years.