I snipped this out of the USA Today last month, while I was in Salt Lake City.
Business bankruptcy filings are down, while non-business bankruptcies are up.
This was the USA Today Snaphot ®…found in the lower left corner of the front page. It’s a great place to get a little slice of the statistical makeup of our nation. Sometimes it’s silly stuff, like whether people prefer popcorn or Junior Mints at the movie theater.
This particular day, and sorry, I didn’t save the date, the paper reported the following information on bankruptcy filings
Year - Business - Personal - Total
2001 40,099 - 1,452,030 -1,492,129
2002 38,540 - 1,539,111 - 1,577,651
2003 35,037 - 1,625,208 - 1,660,245
So, what conclusions can we draw from this data? I suppose it depends on our audience and what we are trying to prove. To a banker when we are applying for a business loan, we could conclude that businesses are being more successful, and making a business loan decision is a better risk for the bank than a personal loan decision.
Or, we could argue that fewer home-based businesses are bothering to incorporate, and just as many businesses are failing. Now while I don’t recommend this, being the asset protection advocate that I am, it is a conclusion that could be drawn.
Or we could argue that more lenders are requiring that business owners personally guarantee all of their business loans, so that most business bankruptcy (”bk”) filings also represent a personal bk filing, thus explaining the increase in personal bk. Or perhaps they avoid filing bk for the company, if their business lenders only require them to sign personally.
Or maybe there are just more people… or less businesses…
Mark Twain said there are three types of lies, lies, damn lies and statistics. And that’s the trouble with the USA Today Snapshots. It’s too little information from which to draw an accurate conclusion. At best, we have a little bit of trivia.. that business bks declined by almost 13% between 2001 and 2003. Overall, not a bad statistic.
Donna
PS. Come to think of it, let me strike my assertion that that movie theater example is silly stuff. If I were in the movie theater business, that would be good market research.
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