Comparing small businesses that have previously filed for bankruptcy to those that have not gone down that road, some firms are no more burdened than others by poor cash flow, high health insurance costs or excessive taxes.
The Small Business Administration's Office of Advocacy offered that conclusion in a new report, “Beyond Bankruptcy: Does the Bankruptcy Code Provide a Fresh Start to Entrepreneurs?” Firms are surviving years after the filing, according to the report. The data also showed that there is little to distinguish these firms in terms of firm size, as measured by employment.
“Small businesses filing for bankruptcy have an opportunity for a new start. This new start is hampered by the challenges of obtaining new loans. This can impede innovation and job creation,” said Winslow Sargeant, chief counsel for the SBA's Office of Advocacy.
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