Do you want the bad news first, or the good?

Interest rates are the highest they’ve been in 22 years and small business bankruptcies are on the rise, per recent reporting from the Wall Street Journal. 

With nearly 1,500 small businesses already declaring bankruptcy in 2023, we’ve surpassed last year’s total with another quarter of the year remaining. Add to that the rising averages for loan delinquencies and defaults - now tracking above pre-pandemic levels per Equifax - and there’s clearly some stress factors at play for small business owners when also factoring in the inflated costs of goods and employee wages. 

In talking to some owners - or worse, reading the comments on some business forums and blogs - it appears there’s even more hidden trouble. Some owners who borrowed less than $200,000 through the COVID Economic Injury Disaster Loan program are simply walking away from these obligations, rather than declare bankruptcy, since they’ll face no personal liability. 

But it’s not all bad news! There are over 30 million small businesses in America, so some perspective is important when considering their relative health. According to recent data from the US Chamber of Commerce and MetLife: 

• 71% of small business owners say they expect next year's revenue to increase

• 66% of small businesses reported being in good health

• 72% feel comfortable with their cash flow

It's amazing to hear a majority of small business owners are optimistic about the economy's prospects, but like we covered last week, Cash Rules Everything Around Me for small businesses. Whether you need a major shift in strategy to stay afloat or you’re looking for help scaling because you can’t keep up with how quickly your business is growing, Third Act is here to help.