Small businesses throughout the United States are currently filing for bankruptcy at a record pace, exceeding the levels observed in 2020 at the height of the coronavirus pandemic.

According to a UBS Evidence Lab note reviewed by The Epoch Times, the four-week moving average for private filings was 73 percent higher than it was in June 2020. They also warned the situation may worsen as the repercussions of the recent banking crises start to manifest.

“[We] believe one of the more underappreciated signs of distress in U.S. corporate credit is already emanating from the small- and mid-size enterprises sector,” Matthew Mish, head of credit strategy at UBS, wrote in the recently published research memo. “[The] smallest of firms [are] facing the most severe pressure from rising rates, persistent inflation and slowing growth.”

The recent surge in bankruptcies is mainly the result of the Federal Reserve’s monetary tightening, which was implemented to address inflationary pressures. Additionally, UBS noted that concerns about a credit crunch have exacerbated the increase in defaults. Real estate, healthcare, chemicals, and retail outlets are among the industries that have been most severely impacted by the wave of bankruptcies.

Data from the American Bankruptcy Institute reveals that as of February 2023, monthly bankruptcy filings have surpassed 31,000, an 18 percent increase from the 25,564 filings recorded in February 2022. The number of Chapter 11 bankruptcies, usually used by larger businesses, increased by 83 percent during the same period, with a total of 373 filings reported in February.

As the situation deteriorates, President Joe Biden has repeatedly downplayed the gravity of it and insisted that his economic plan is providing remarkable results.

When I came into office, the — this economy was reeling.  Small businesses were hurting.  Literally hundreds of thousands of small businesses had closed across the country.  Millions of Americans, many of whom worked in small businesses, lost their jobs through no fault of their own.

To jumpstart American economic recovery, we needed to help the small businesses and we needed to help them fast.  So we got to work.  I signed the American Rescue Plan.  Since I took office, we’ve delivered more than $450 billion in emergency relief to 6 million small businesses to help you pay your bills, to pay your workers, to keep your doors open.

He went on to claim that his administration has created 12.4 million, a somewhat misleading figure given the number of jobs that were destroyed during the pandemic:

Today, thanks to actions like these, we’ve achieved the fastest, strongest, most equitable recovery in American history.  We’ve created 12.4 million new jobs.  That’s more jobs… in two years than any president has created in a four-year term.  And a majority of those jobs are held by women.

Unemployment is near a 50-year low.  And record number of people have applied to start new businesses — nearly 10,500,000 applications in the past two years.

Meanwhile, the administration plans to raise the corporate income tax to 28 percent sometime over the next few months, a move that will inevitably increase pressure on small businesses already struggling under the pressures of inflation and changes in the broader economy.