A business that enters a formal process, or against whom an order has been made to sign over their assets, as they cannot meet their financial obligations.
- Business bankruptcy indicators in Peel improved in the first quarter of 2020.The number of business bankruptcies continued to trend downward when only 8 cases were recorded in the first quarter of 2020.
- Net liabilities associated with total business bankruptcies was approximately $2 million, a significant fall relative to the comparable quarter of 2019.
- The onset of the COVID-19 pandemic will likely result in higher business bankruptcies and associated net liabilities throughout the remainder of 2020.
The downward trend in business bankruptcies in Peel Region continued in the first quarter of 2020 with a total of only 8 cases, down 42.9 per cent from 14 cases in the first quarter of 2019.
With the onset of COVID-19 and associated business closures, business bankruptcies are likely to increase in Peel in upcoming quarters.
Federal and provincial government supports are available to eligible and impacted Peel businesses to address cash flow and liquidity challenges. This will likely dampen the severity of the shock.
Net Liability of Business Bankruptcies
Net liabilities of all business bankruptcies decreased by 94.8 per cent in the first quarter of 2020 to approximately $2 million.
The more pronounced decline in net liabilities relative to the number of bankruptcies suggest businesses with smaller debt levels filed for bankruptcy in the first quarter of 2020.
Net liabilities per business bankruptcy case decreased by 90.8 per cent relative to the first quarter of 2019.
Both the number of business bankruptcies and net liabilities are likely to increase in 2020.