Throughout the entirety of this COVID-19 pandemic, we’ve known that a time wold come in which we would have to lie in the bed we had just made for ourselves.
Lengthy and potent lockdowns plagued locales from coast to coast, and small businesses had to adapt or die. Many were able to chose the former, while many, many more were forced into the latter.
Now, just as the vaccine deployment plan starts coming to fruition, we’re beginning to see some of the worst of the delayed fiscal impacts.
Nearly a year since coronavirus-related shutdowns began affecting large swaths of the American economy, more businesses are filing for bankruptcy as Chapter 11 filings were up nearly 20 percent in 2020 compared with the previous year, court records show.take our poll - story continues below
Data on a subset of businesses ― those registered as corporations ― show that some sectors are faring much worse than others, with restaurants, retailers, entertainment companies, real estate firms and oil and gas ventures filing for protection in far greater numbers than in previous years, according to New Generation Research.
Bankruptcies filed by entertainment companies in 2020 nearly quadrupled, and filings nearly tripled for oil and gas companies, doubled for computer and software companies and were up 50 percent or more for restaurant owners, real estate companies and retailers, compared with 2019, data from the research firm show. There were 5,236 Chapter 11 filings in 2019, but 6,917 last year, a tally at least 30 percent higher than any of the previous four years.
There is some good news, however.
Economists are predicting strong economic growth this year overall. But the bankruptcy data show that despite $3.7 trillion in federal stimulus spending to combat the recession triggered by the pandemic, and another $1.9 trillion being proposed by President Biden, businesses in certain industries have become particularly vulnerable and may take years to recover enough to pay their bills. Others will not recover at all.
Some have even gone as far as to suggest that, as the viral threat wanes, the nation could find itself at the foot of a new “roaring 20’s”, as formerly pent-up Americans, flush with saved cash, return to “normal” with a vengeance.
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