Increase in Small Business Bankruptcies

Small business bankruptcies have surged by 61% this year, driven by rising inflation, high interest rates, and the repayment of COVID-related loans. A significant number of small enterprises are struggling to meet the terms of the $380 billion in economic injury disaster loans they received during the pandemic, with about 80% of these loans still outstanding. Consequently, many are facing financial distress, leading to a wave of bankruptcies among commercial establishments. Major retail chains, especially those in consumer discretionary sectors like restaurants, are particularly hard-hit, marking a troubling trend in the economy.