Private Companies Increasingly Going Bust as Profit Shrinks

A recent report reveals that private U.S. companies are experiencing a significant decline in earnings and profit margins following the Federal Reserve’s interest rate hikes, leading to escalated financing costs and an increasing number of business failures.

While larger corporations have, to a large extent, remained shielded from this economic strain, they often rely on mid-sized private firms as suppliers.

The potential collapse of these smaller businesses poses a threat to supply chains and could elevate costs for larger enterprises, as highlighted in the report by Marblegate Asset Management and Rapid Ratings on Monday.

The repercussions of this economic downturn in private companies may extend to investors in one of the rapidly growing segments of debt markets: private credit lenders, BNN Bloomberg reported.

read more: https://www.bnnbloomberg.ca/private-us-companies-increasingly-going-bust-as-profit-shrinks-1.2019106

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