The bankruptcy rates are anticipated to continue their upward trend in 2025.
James Gellert, the executive chairman of RapidRatings, recently appeared on Asking for a Trend, where he forecasts a global rise in bankruptcies and restructurings.
“I believe we will see a continued rise in these issues worldwide, along with an increase in restructurings,” he comments.
He points out that the previous year recorded a 2-to-1 ratio of restructurings compared to bankruptcies, representing a significant rise from the standard 1-to-1 ratio. “The fact that more firms are proactively communicating with their lenders is quite a noteworthy change,” Gellert notes.
He links this trend to over ten years of easy credit that hid underlying operational issues. The financial stability of private and middle-market firms has deteriorated, particularly with the increasing costs of capital, labor, and goods. This situation poses considerable stress that could impact supply chains.
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This article was authored by Josh Lynch.
