Brandy Auterson-Hurst:
It’s now time for 4 Your Money. We’re joined by John Nelson, financial planner at NelsonCorp Wealth Management. Welcome back, John.
John Nelson:
Thank you for having me, Brandy.
Brandy Auterson-Hurst:
So John, it sounds like the data continues to show struggles for small businesses. What are you seeing?
John Nelson:
Yeah, so we are seeing that, unfortunately, kind of record numbers of Subchapter 5 filings for super small businesses. That’s a little bit different. It’s a more streamlined filing instead of Chapter 11 for say larger businesses. And the graphic I have with me today, Brandy, just illustrates that point.
So we’ve seen in 2025, we’re up over 2200 filings for subchapter five so far this year. That’s about an 80% increase since 2020. So definitely up and something we’re definitely keeping an eye on here carefully.
And the driving force, from our standpoint, it’s a combination of say higher interest rates, borrowing costs, softer consumer demand, and of course kind of ongoing pressures from trade tensions that many are dealing with, especially in the very small business sector.
Brandy Auterson-Hurst:
So does this tell us anything about the broader economy or what investors should be watching?
John Nelson:
Yeah, I think it does. We’re seeing, oftentimes some of those leading indicators show up in the small and very small businesses prior to becoming more broad in nature in the overall economy. So those are some of the warning signs that we’re watching carefully. We’re going to report back on that in upcoming shows. But just caution and keeping things in a place that’s reasonable at this point. But if we see this number increase further, it’ll be much more concerning.
Brandy Auterson-Hurst:
All right. Always some great advice. Thanks, John.
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