Subchapter V filings intended for small businesses have risen 8% annually to 2,221 bankruptcies as of November 2025. Bloomberg and other various sources are blaming Trump’s tariffs, but they are missing the mark entirely.
“High borrowing costs, cautious consumers and the Trump administration’s trade war are weighing on earnings for the smallest businesses,” Bloomberg reported. “High borrowing costs, cautious consumers and the Trump administration’s trade war are weighing on earnings for the smallest businesses.”
Interest rates have been on the rise since 2022, reversing the cheap credit pipeline that fueled overleveraging. Firms both big and small relied on that easy money, and who could forget the immense PPP loans provided to businesses in the wake of the pandemic. Small businesses operate on thin margins and are vulnerable to cost increases or supply chain disruptions. Inflation has never meaningfully waned since the pandemic. It costs more to buy and more to borrow. Consumers are spending more on less and placing the essentials on credit.
Bankruptcies are not limited to Main Street. Reuters reported that US corporate bankruptcies are looking at a 15-year high based on S&P Global data. Corporate bankruptcy filings hit 655 through October compared to 687 for the duration of 2024. The industrials sector alone saw 98 businesses go under due to supply chain vulnerabilities. Larger corporations may be less vulnerable to shocks but they are still burdened by debt.
No one is immune to the current situation. Corporations with assets exceeding $100 million are seeing a surge in closures and bankruptcies. Trends in Large Corporate Bankruptcy and Financial Distress—Midyear 2025 Update found that filings began to increase in early 2023 and have continued to rise into 2025. Over the past year, 117 mega corporations filed for bankruptcy. This is unusually high and 44% above the 2005-2024 average of 81 bankruptcies per year.
Mega bankruptcies or corporations with assets exceeding $1 billion are also on the rise, with 32 filings in the past month, up from 24 the year prior. The 2005-2024 average was 23 per year. In the first half of 2025 alone there were 17 mega bankruptcies on record, marking the highest figure on record since the pandemic of 2020.
The problem is structural in nature and far more complex than a crisis caused by tariffs. The fact that mega bankruptcies are rising shows that even large, previously “too big to fail” firms are no longer immune from collapse and suggests a weakening foundation that threatens the broader financial system.
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