BUSINESS STRATEGY | APRIL 2026
By the Black Tyger Strategies Team
In 2025, the United States recorded the highest number of large corporate bankruptcies ever tracked outside of an official recession. Standard & Poor’s counted 785 significant business filings. Cornerstone Research noted 32 of those involved companies with more than a billion dollars in reported assets. Personal bankruptcies and small business failures climbed sharply above the prior year, which itself was not a good year.
The names that made the headlines — Nikola Motors, Forever 21, Hooters, Rite Aid filing for the second time in eight months — were easy to dismiss as obvious failures hiding behind convenient excuses. Tariffs. Higher interest rates. Declining consumer demand. And to be fair, some of those factors played a real role. But they are not the full story. The full story is more uncomfortable, and it starts almost twenty years ago.
When Cheap Money Became the Strategy
From roughly 2008 through 2022, the cost of borrowing money was, by any historical measure, extraordinarily low. Central banks around the world held interest rates near zero in response to the financial crisis, and then held them there through a slow recovery, and then held them even lower through a pandemic. For nearly two decades, capital was abundant and almost free.
In that environment, something quietly shifted in how businesses were run. Borrowing to fund operations stopped being seen as a sign of financial stress and started being sold — actively, by lenders, by private equity, by financial advisors — as a mark of strategic sophistication. Why use your own cash when you can leverage someone else’s at near-zero cost and deploy your capital into growth instead? The logic was not unreasonable. The problem was that it gradually replaced operational discipline with financial engineering as the primary business skill.
Debt became a substitute for strategy. And for nearly two decades, the interest rate environment made that substitution nearly invisible.
Businesses that should have been forced to confront their operational weaknesses — thin margins, bloated cost structures, outdated business models, products that customers were slowly abandoning — were instead kept alive by their ability to roll cheap debt forward. Each refinancing bought another cycle. Each cycle made the underlying problems a little harder to see and a little more expensive to eventually fix. Economists have a term for these businesses: zombie companies. And over twenty years of artificially cheap money, the economy quietly accumulated a very large number of them.
The Find-Out Stage of the Business Cycle
When interest rates began rising in 2022 and stayed elevated through 2024 and 2025, the support structure that had been keeping many of these businesses upright was removed. Not all at once — debt matures on schedules, refinancing windows open and close — but steadily and with increasing force. What followed was not so much a collapse as a reckoning. Companies that had been functioning on the financial equivalent of a payment deferral were now being asked to actually pay.
The result is what analysts have started calling the find-out stage of the business cycle. Decades of low rates created the conditions — the excessive leverage, the deferred operational reform, the tolerance for businesses that generated activity without generating real returns. Rising rates and tightening credit are simply the moment when the consequences of those conditions become impossible to ignore any longer.
It is worth noting that interest rates at their current levels are not historically extreme. Businesses operated profitably in far higher rate environments throughout the twentieth century. The difference is that those businesses were built under the assumption that borrowing was expensive and should be used sparingly. Today’s troubled businesses were built under the assumption that borrowing was effectively free — and they were structured, priced, staffed, and operated accordingly.
The Consolidation Nobody Is Talking About
The way many of these failures are resolving deserves attention in its own right. Chapter 11 bankruptcy in the hands of sophisticated financial operators has become less a last resort and more a transaction mechanism — a structured way to shed debt, sidestep regulatory scrutiny, and transfer business operations to a new owner at an accelerated pace that normal acquisition processes would never permit.
When Rite Aid filed for bankruptcy and sold its pharmacy locations to CVS and Walgreens, it did not save those pharmacies. It eliminated a competitor and left entire communities with a single option for filling a prescription. The operations survived on paper. Competition did not. And because bankruptcy sales move quickly by design — minimizing the window for antitrust review — the consolidation happens before regulators can meaningfully respond. This pattern is repeating across healthcare, retail, energy, and real estate. Industries that were supposed to be recession-proof are discovering that leverage-proof and recession-proof are not the same thing.
What This Means for Your Business
If your business was built on the assumption that cheap financing would always be available to smooth over operational gaps, the current environment is a forcing function. The window to restructure from a position of strength — before the debt becomes the story — is always shorter than it looks.
But the more important lesson is not about debt levels. It is about what debt was masking. The businesses now failing at scale are not failing because interest rates rose. They are failing because rates rose and revealed that the underlying operation was never as viable as the financing made it appear. The margin was borrowed. The runway was borrowed. In some cases, the entire business model was borrowed — built on the assumption that free money would perpetually fund what customers alone would not.
At Black Tyger Strategies, the first thing we look at when assessing a business is not its revenue — it is the relationship between its revenue and its operational structure. A business that can sustain itself, invest in its own growth, and serve its clients well at the current cost of capital is a business built on something real. A business that requires external financing to do any of those three things is a business with a strategy gap, not a financing gap.
The zombie era is ending. The businesses that will be standing when it is fully over are the ones that used the cheap money years to build genuine operational capability — not the ones that used it to defer the work of becoming genuinely good at what they do.
The market is no longer subsidizing operational weakness. The question is whether your business was built to stand on its own.
If you want an honest assessment of where your business stands — and what it would take to build something that holds up in any rate environment — let’s talk.
Black Tyger Strategies is a Full Stack Digital Solutions Business Development Consultancy specializing in IT Project Management, Custom Software Development, Digital Transformation Consulting, and Cybersecurity & Risk Management.