Small Business Bankruptcies in the US Have Jumped 46 Percent This Year

Nearly 470,000 bankruptcy cases were filed in the United States in the first nine months of 2026, up 11 percent on the same period last year. Filings by small businesses rose 46 percent.

The gap between those two numbers is the story. An 11 percent rise in total filings is a weakening economy. A 46 percent rise in small business filings, inside that same total, is something narrower and sharper: the firms with the least cash and the most expensive credit are failing at four times the general rate.

What is squeezing them

Three pressures arrive together. Living costs are rising again, which compresses what households spend in small businesses. Loans are expensive, which raises the cost of the working capital those businesses run on. And credit card debt is mounting, which is where undercapitalised firms in the US go when the bank says no.

A small business can survive any one of these. The combination removes the options in sequence: demand falls, the cheap refinancing is gone, and the expensive refinancing is already drawn.

With inflation picking up again, the direction of travel is not toward relief.

Why an Ethiopian reader should care

Two channels, both practical.

The first is the order book. Ethiopian exporters selling into US buyers — apparel, leather, speciality coffee, horticulture — sell disproportionately to mid-sized and small importers and distributors, not to the handful of giants. A 46 percent rise in small business failures is a rise in counterparty risk on exactly those accounts. Receivables from a US buyer are worth checking this quarter.

The second is the cost of money. The same expensive credit that is closing American small firms sets the global rate environment in which Ethiopia refinances, and in which the diaspora decides whether to send money home or hold a buffer.

Open

The figures cover the first nine months of 2026 and are a count of filings, not of businesses closed — many firms fail without filing, and some filings are restructurings that survive. The sectoral breakdown behind the 46 percent has not been published.

Sources: Venture Capital, 26 October 2026