Sacramento Leads Nation In Entrepreneurial Bankruptcy Rate
SACRAMENTO (CBS13) — Sacramento is the top of the list when it comes to the number of entrepreneurs filing for bankruptcy.
Empty storefronts and locked doors are a common sight in Sacramento that pains shop owners like Sal Ordonez.
“I empathize with them, I have compassion as I know what it takes to keep a business running,” said the owner of Baja Insurance.
According to Experian, Sacramento’s business bankruptcy rate is the highest in the nation as 2.41 percent of all entrepreneurs go belly up.
That’s a figure you’d expect during the 2008 recession, but why are there so many five years later?
“A lot of them held on simply because they cashed out retirements, 401(k)s, IRAs, that type of stuff just to keep the doors open, thinking, ‘It’s going to turn around, it’s going to turn around,’” said bankruptcy attorney Gary Fraley.
The region’s economy is still heavily reliant on government jobs, and unemployment still hovers around 8 percent.
While the bankruptcy rate is already the highest in the nation, Fraley worries it could go higher.
“I think its going to get worse,” he said. “I’m concerned for small businesses in the next two or three years.”
On the brink of filing several times himself, Ordonez says he has become accustomed to this type of uncertainty.
“You just have to stay with it and work harder,” he said.