The impact of increased interest burdens on small and midsize companies following the Bank of Japan’s interest-rate hikes was estimated based on 321,953 companies. A 0.50-point increase in interest rates would reduce average ordinary profit and worsen the loss-making company ratio from 27.7% to 29.4%.
Tokyo Shoko Research has published an estimate that lending rates to companies have entered an upward phase following the Bank of Japan’s termination of its negative interest rate policy, increasing interest payment burdens for small and midsize companies and putting pressure on earnings. The analysis examines the impact on financial results of interest-rate increases ranging from 0.25 to 1.00 points, based on estimated changes in interest payments and interest income.
When interest rates rise 0.50 points, the loss-making company ratio across all industries is expected to increase from 2025 levels, with the real estate industry particularly affected. The loss-making company ratio for real estate companies is calculated to worsen by 5.3 points, attributed to their high reliance on borrowings to acquire land and buildings. Finance and insurance companies are also expected to see a substantial deterioration, while the deterioration is expected to be smaller in the construction and information and communications industries.
By industry, real estate-related businesses and aquaculture businesses stand out for increases in their loss-making company ratios. By region, Kinki is expected to see the largest deterioration, with notable deterioration also observed in Tohoku, Shikoku and Chugoku. Average ordinary profit is expected to decline substantially in the real estate and finance and insurance industries, while some cases in the construction and information and communications industries show slight increases.
The survey covers 321,953 small and midsize companies that reported interest-bearing debt in their financial data (January–December 2025) and analyzes the impact of higher interest rates on their profit and loss.