The trend of rising bankruptcies among small and mid-sized businesses has been exacerbated by the recent bank collapses in Silicon Valley. The healthcare sector and smaller regional and community banks are particularly vulnerable to the credit stress that has seeped into the labor market. This could lead to a Main Street credit crunch, making it harder for individuals and businesses to get loans. The FDIC is facing over $20 billion in costs as a result of the turmoil, and there are concerns that other vulnerable banks may be forced to pull back on lending.

The surge of financial distress that is expected to hit businesses in the near future presents significant challenges in the current economic environment. The combination of rising rates, sticky inflation, and slowing growth has created a perfect storm for businesses that are already struggling to stay afloat. The healthcare industry, in particular, is facing significant challenges due to the ongoing pandemic.

One of the major challenges facing small and mid-sized businesses is access to credit. As banks become more cautious about lending, businesses are finding it increasingly difficult to secure the financing they need to grow and expand. This is particularly true for businesses in the healthcare sector, which often require significant capital investments to keep up with advances in technology and changes in regulations.

Another challenge facing small and mid-sized businesses is the rising cost of labor. As the labor market tightens, businesses are being forced to pay higher wages in order to attract and retain talented employees. This is particularly true in industries such as healthcare, where skilled workers are in high demand.

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