Some industries are performing significantly worse than the national average, which sees two-thirds of firms (67%) report taking on debt and with businesses owed an average of $158,000.
“The hospitality and arts and entertainment businesses hardest-hit by the pandemic are likely to close permanently for the entire quarter as a result of losses caused by COVID restrictions,” Kelly said.
As most small enterprises remain in debt, the percentage of businesses contemplating bankruptcy is increasing. Since the start of 2022, the percentage of enterprises reporting regular sales has climbed marginally from 31% to 35%. Unless more businesses are able to return to normal sales, their ability to meet new costs or repay loans will be severely hampered.
Among the industries that have felt the strongest blow of the pandemic, hospitality and arts and entertainment, have considered bankruptcy at an outsized rate, with 28% and 23%, respectively, compared to only 14% among businesses overall.
The hospitality industry alone accrues an average debt of $206,462 per business, while arts and entertainment businesses owe an average of $182,876. These compare to the $158,128 average debt per business nationally.
