Equifax 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.

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.

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 these 15 MSA's experienced a decrease in the number of bankruptcy petitions from Q2 2010 to Q3 2010 as well as year-over-year.