Equifax, the renowned credit agency from Atlanta, has revealed that the cases of small business bankruptcy have come down by a promising 15 percent in the first quarter of 2011 over the first quarter of 2010. The 15 percent drop in bankruptcy rate for small sectors has come as a welcome news to the industry as it signifies that the sector is on the ascendancy.

However, there is still a long way to go before the pre-recession state could be achieved. The study shows that despite a 15% drop over last year, it is still 30% higher than the 1^st quarter of the pre-recession year of 2008.

Small businesses (defined by Equifax as concerns with lower than 100 employees) form a core part of most economies and the growth of a nation is highly reliant on the state of this sector. The study also reveals that amongst the many nations, California has emerged as the worst for reorganisation or liquidation of the small business. California’s metro cities grabbed 4 out of the 5 top spots on the small business filings list. Los Angeles metro was declared the worst region with 1,048 small businesses going for liquidation owing to Chapter 7 or Chapter 11 bankruptcy.

Thus, though the overall condition seems promising, there are many underlying problems that threaten this sector. The current state of economic turbulence and share market depression are enough to suggest that the overall scenario is not a bright one and there is a growing need for growth of small businesses.