Equifax Study Shows Small Business Bankruptcies Rise and Fall in Select Regions
Los Angeles and Denver See Increase in Bankruptcy Petitions, Atlanta and Chicago Report Sizeable Drop-Off
ATLANTA, GA -- (MARKET WIRE) -- 12/01/10 -- Equifax (NYSE: EFX) today announced the results of its Q3 2010 study on the state of small business bankruptcy -- a key indicator of the financial health of business markets across the United States. Analyzing bankruptcy trends among the nation's more than 24 million small businesses, Equifax found that the Western regions continue to experience economic turbulence with some decrease in bankruptcy rates across select MSA's in California, Texas and Illinois. While bankruptcies have slowed in some regions, small business economic challenges continue to pressure many areas and impact the pace of recovery in certain markets.
"Our analysis on small business bankruptcy continues to indicate ongoing uncertainty in today's marketplace," said Dr. Reza Barazesh, senior vice president, Equifax Commercial Information Solutions. "While business bankruptcies have begun to reverse course in some regions, it remains to be seen how small firms will steer through economic headwinds and sustain growth."
Focusing on the Q3 2009 to Q3 2010 timeframe, this Equifax study analyzed national bankruptcy trends by metropolitan statistical area (MSA). While bankruptcy rates remain high across the nation, 11 of the top 15 MSA's with the highest number of small business bankruptcies in Q3 2010 saw a year-over-year decline from Q3 2009. The table below shows that the Los Angeles, San Bernandino and Santa Ana MSA's experienced year-over-year bankruptcy rate increases while areas such as San Diego and Oakland reported double-digit declines year-over-year in Q3 2010 -- a striking development considering California's economic challenges. Another interesting finding, the Atlanta/Sandy Springs/Marietta and Chicago/Naperville/Joliet MSA's saw a bankruptcy rate decrease of 26.75% and 16.67% respectively.
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MSA Bankruptcy Bankruptcy % of
Total Q3 Total Q3 Change
2009 2010
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Los Angeles-Long Beach -Glendale, CA 1051 1099 4.57%
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Riverside-San Bernardino -Ontario, CA 759 835 10.01%
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Sacramento-Arden-Arcade -Roseville 557 484 -13.10%
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Santa Ana-Anaheim-Irvine, CA 417 428 2.64%
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Denver-Aurora, CO 400 415 3.75%
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Houston-Sugar Land-Baytown, TX 408 383 -6.13%
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San Diego-Carlsbad-San Marcos CA 430 379 -11.86%
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Portland-Vancouver-Beaverton, OR-WA 398 375 -5.78%
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California -- Rest of State 353 349 -1.13%
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Dallas-Plano-Irving, TX 384 326 -15.10%
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New York-White Plains-Wayne, NY-NJ 321 316 -1.56%
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Chicago-Naperville-Joliet, IL 378 315 -16.67%
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Atlanta-Sandy Springs-Marietta, GA 402 296 -26.37%
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Oakland-Fremont-Hayward, CA 331 291 -12.08%
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Oregon -- Rest of State 283 279 -1.41%
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Total 6870 6567 -4.41%
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While the total number of bankruptcies among the top 15 MSA's with the highest number of small business bankruptcies in Q3 2010 declined 4.41% from 6,870 in Q3 2009 to 6,567 in Q3 2010, economic instability continues to impact many of these areas. Equifax data shows that 9 of the top 15 MSA's reported a year-over-year increase in bankruptcy when comparing the first three quarters of 2009 to the same time period in 2010. Further analysis of this time period revealed that the total number of petitions for these 15 MSA's dropped by 1.23% -- signaling a nominal decline in overall bankruptcy rate.
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MSA Q1 - Q3 2009 Q1 - Q3 2010 % of Change
Total Total
Bankruptcies Bankruptcies
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Los Angeles-Long Beach-Glendale, CA 2922 3338 14.24%
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Riverside-San Bernardino-Ontario, CA 2180 2379 9.13%
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Sacramento-Arden-Arcade-Roseville 1624 1548 -4.68%
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Santa Ana-Anaheim-Irvine, CA 1178 1210 2.72%
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Denver-Aurora, CO 1111 1247 12.24%
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Houston-Sugar Land-Baytown, TX 1163 1230 5.76%
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San Diego-Carlsbad-San Marcos CA 1169 1175 0.51%
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Portland-Vancouver-Beaverton, OR-WA 1076 1153 7.16%
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California -- Rest of State 965 1057 9.53%
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Dallas-Plano-Irving, TX 1146 1024 -10.65%
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New York-White Plains-Wayne, NY-NJ 1039 896 -13.76%
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Chicago-Naperville-Joliet, IL 1554 945 -39.19%
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Atlanta-Sandy Springs-Marietta, GA 1162 884 -23.92%
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Oakland-Fremont-Hayward, CA 985 855 -13.20%
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Oregon -- Rest of State 858 943 9.91%
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Total 20,132 19,884 -1.23%
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As part of the study, Equifax also analyzed the 15 metro areas with the fewest small business bankruptcy filings in the third quarter of 2010. Our research showed that 10 out of these15 MSA's experienced a decrease in the number of bankruptcy petitions from Q2 2010 to Q3 2010 as well as year-over-year. The table below shows that all of these MSA's reported 11 bankruptcies or less during Q3 2010.
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MSA Bankruptcy Bankruptcy Bankruptcy
Total Q3 Total Q2 Total Q3
2009 2010 2010
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Lynchburg, VA 13 5 11
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Huntington-Ashland, WV-KY-OH 17 8 11
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Davenport-Moline-Rock Island, IA-IL 12 15 11
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Corpus Christi, TX 21 24 11
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Alaska - Rest of State 6 11 11
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Lafeyette, LA 8 17 10
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Clarksville, TN-KY 13 10 10
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Gainesville, Fl. 3 9 8
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Durham, NC 26 10 8
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Trenton-Ewing, NJ 10 13 7
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Shreveport-Bossier City, LA 13 12 7
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Charleston, WV 3 7 7
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South Bend-Mishawaka, IN-MI 3 15 6
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Kingsport-Bristol, TN-VA 7 10 6
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Amarillo, TX 10 6 5
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Total 165 172 129
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For this study, Equifax applied analytics to identify the total number of small businesses and define the MSA's within the sample population. Equifax classifies a small business as a commercial entity of less than 100 employees. As part of the study, Equifax analyzed Chapter 7, 11 and 13 filings. Chapter 7 is a liquidation proceeding in which a debtor receives a discharge of all debts, while Chapters 11 and Chapter 13 are reorganization bankruptcies that allow individuals and companies to pay off debt over a set period of years. To learn more about Equifax Small Business Solutions, visit www.equifaxsmallbusiness.com.
About Equifax (www.equifax.com)
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Equifax Commercial Information Solutions is the leading provider of small business intelligence. We provide the information and expertise necessary for companies to best understand and manage their dealings with small business customers, prospects and suppliers. Our best-in-class commercial credit risk data, combined with highly predictive scoring, corporate linkage, and innovative technology, enables companies to make quick, confident credit decisions and minimize potential losses. Leveraging our EFX ID® keying and linkage technology, companies can also gain greater visibility into their supply chain as well as improve the precision of their sales and marketing efforts -- from customer acquisition to retention and expansion.
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<b>Contact: </b>Jennifer Costello 404-885-8907 jennifer.costello@equifax.com
Released December 1, 2010