The number of corporate insolvencies in Germany has increased significantly. Specifically in March 2026, approximately 2,300 companies filed for insolvency, representing an increase of 15.8 per cent compared to the same month last year and marking the highest figure since 2018. This development indicates a stress test for established business models, capital structures, and the investment capacity of small and medium-sized enterprises.
Analyses show that this increase is not solely due to a general economic downturn, but reveals deeper burdens that have accumulated over years. The situation necessitates a comprehensive inventory to identify which companies are coming under pressure, which structural deficiencies are becoming evident, and what role financing options play in this.
Factors in the Development of Insolvencies
Several factors are crucial for the rise in closures. The interest rate turnaround from 2022 made external capital more expensive, while energy and personnel costs remain at a high level. Additionally, weak domestic demand and protectionist trade policies are burdening the export business. The situation is particularly precarious for sectors with small capital buffers and high cost sensitivity.
- —Transport and storage: 32.1 cases per 10,000 companies
- —Hospitality: 30.3 cases per 10,000 companies
- —Construction industry: 26.7 cases per 10,000 companies
Precisely in these segments, where cost increases, demand fluctuations, and tight liquidity margins dominate, situations threatening existence can quickly arise. A chain reaction is often observed here: if an important client defaults, suppliers, subcontractors, and service providers often come under pressure as well, meaning a single company crisis can become a problem along the entire value chain.
Importance of Financing Structure
Many business models were developed during a period when capital was cheap and borrowing was straightforward. The current interest rate reality fundamentally alters these conditions. For small and medium-sized enterprises, this means that external capital costs are rising, while many companies are already operating on tight financial calculations. Banks are also acting more cautiously in lending, which further complicates the situation. Younger companies or those with a limited credit history, as well as capital-intensive sectors, are particularly affected. This is problematic, as investments in digitalisation or energy efficiency would often be urgently required.
It is important to differentiate between various causes of insolvency. Not every insolvency indicates a failed business model. Companies can also run into a crisis due to short-term liquidity problems, such as delayed customer payments. In such cases, adjusting the financing mix can provide a remedy. Structural deficiencies, on the other hand, exist if the operating margin declines over years despite stable revenues or if market shares are lost. A high equity ratio is considered an essential buffer here, enabling companies to absorb losses without jeopardising solvency too quickly. This allows more robust companies to weather economic downturns.
