Surging borrowing costs may finally be easing but global corporate failures are set to rise again in 2026, according to a new analysis from trade credit insurer Coface.
Coface expects worldwide business insolvencies to increase by 2.8% in 2026, after three consecutive years of sharp rises in interest rates. Its modelling showed that a 25-basis-point increase in business lending rates, relative to current expectations, would be enough to push global insolvency growth back up towards 4% to 5% in 2026, effectively erasing the anticipating deceleration and keeping failures on a trajectory similar to 2025.
"2026 should offer a respite rather than an improvement," said Jonathan Steenberg, economist for Northwestern (UKI, Benelux and Nordics) countries at Coface. "The number of insolvencies will not fall: it will simply stop accelerating. If rates were to ease less quickly than anticipated, then stabilisation would immediately disappear.”
Behind the headline 2.8% forecast, Coface also pointed to a still-fragile landscape. Corporate debt remains elevated, margins are under pressure and several sectors – notably construction, chemicals and textiles – have limited debt‑servicing capacity and are already showing signs of strain.
In Europe, Coface saw a delicate stabilization that is “highly dependent on financing costs.” Germany is forecast to see insolvencies rise by 1% in 2026, while France and the UK are each expected to record a 2% increase, leaving failures at historically high levels. Spain is projected to see a 3% decline, supported by stronger macroeconomic momentum, while Italy’s 2% decline largely reflects statistical effects from procedural reforms and a shrinking base of active companies.
The Netherlands stands out with a 4% rise, which Coface framed as a gradual return to pre‑pandemic norms after an extended period of suppressed failures. Across the continent, the prevalence of variable‑rate corporate debt leaves companies especially sensitive to any deviation from the expected easing path.
North America and Asia‑Pacific showed mixed pictures. In the US, Coface expects business failures to rise by 4%, citing sectors vulnerable to recent policy shifts, including higher tariffs that have been partly absorbed by domestic firms. Canada, by contrast, is forecast to see a 5% decline after a prolonged upswing in insolvencies.
In Asia‑Pacific, Japan is projected to post a 7% increase in failures, weighed down by persistently higher interest rates and sector‑specific weaknesses, while Australia is expected to more or less plateau with a 0.5% rise after a sharp post‑pandemic normalisation.
For insurers and brokers focused on trade credit, surety, D&O and financial lines, Coface’s message is clear: in 2026, the trajectory of business failures will depend less on headline growth and more on the pace and direction of monetary policy. After several years of heavy borrowing, corporate balance sheets are acutely sensitive to funding costs, and even marginal moves in rates could have outsized effects on defaults, especially in capital‑intensive, low‑margin sectors.
That places the cost and availability of credit, rather than GDP alone, at the center of insolvency risk assessment for the coming year, and underscores the need for close monitoring of sectoral exposures, lending conditions and interest‑rate expectations across key markets.
