Business bankruptcies decreased in 2020 despite the Covid-19 crisis

2020 was a bad year for business due to the coronavirus crisis. However, government aid allowed many companies that would otherwise have failed to keep afloat.

At the end of the year, the total number of bankruptcies recorded in Finland decreased by 18.6%.

According to Statistics Finland, 2,135 bankruptcies were filed in January–December 2020, which is 488 (18.6%) bankruptcies less than in the previous year.

There were also fewer workers affected. The total number of employees in companies filed for bankruptcy was 10,876, which is 1,672 (13.3%) less than one year before. However, the number of affected workers increased in some sectors.

Source: Statistics Finland.

Decline in all sectors

The number of registered bankruptcies decreased in all main industries. 

In terms of number, the largest decrease was in the other services sector, where the number of bankruptcies was 700 and there were 130 (15.7%) bankruptcies less than in 2019. However, the number of employees affected increased by 658.

This sector comprises information and communication services, financial and insurance activities, real estate activities, professional, scientific and technical activities, administrative and support service activities, educational services, health and social services, and arts, entertainment and recreation activities. 

In relative terms, the largest decrease in bankruptcies was in transportation and storage, where bankruptcies decreased by 28.7%, down to 139. Again, the number of affected employees increased, despite the decline in bankruptcies.

Initiating a bankruptcy does not always mean that a company or professional is "going bankrupt" in the strict sense of the term. Bankruptcy is a complex and multi-stage legal process in which the proceedings may be interrupted and businesses can be saved, for example after restructuring debt.