The Challenging Credit Picture

Although we’re given good news about the economy, it seems like it is sometimes coupled with bad news. For example, credit markets are returning, but some companies have struggled or are still struggling to the point of filing for bankruptcy. As this WSJ article reports, even with the good news, midsize companies that can’t borrow at a large enough scale to interest investors and companies that are burdened with the weakest credit ratings will still struggle. This forces them to restructure. From January to September of this year, 43,016 businesses filed for bankruptcy, keeping business bankruptcy levels at the highest since the 1990s. Media and entertainment, oil and gas, retail and restaurant industries are the ones that are struggling the most. The question posed by the article is this: Will interest rates remain low enough so that credit markets remain open, allowing companies to continue to refinance and avoid restructuring?

Despite the occasional bad news, continuous improvements in the economy make the outlook for the New Year look more promising. And, of course, Far West Capital is here for your traditional and non-traditional financing needs or if you have questions about financing. Give us a call today.

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.