Average Cost Interest rates on corporate debt in Brazil have shown a worrying upward trend.

In April 2026, rates reached 16,79% per year, reflecting the impact of the rising Selic rate, which has increased substantially in recent years.

This scenario has worsened the financial conditions of companies, hindering access to credit and increasing the risks of financial distress.

In this article, we will explore the main implications of this reality for the productive sector, addressing the evolution of debt, the differences between small, medium and large companies, as well as the effects of public debt and interest expenses on the Brazilian economy.

Evolution of the average cost of corporate interest rates and the Selic rate (2021-2026)

The evolution of the average cost of interest on corporate debt in Brazil between 2021 and 2026 reveals a significant upward trajectory, rising from 14,17% per year in April 2024 to 16,79% per year in April 2026. This increase is directly related to the rise in the Selic rate, which jumped from 2% in March 2021 to 15% in July 2025, reflecting a more restrictive monetary policy to contain inflation.

The impact of this increase in the cost of credit has imposed severe challenges on companies, especially small and medium-sized enterprises, which are facing a scenario of record defaults and financial difficulties.

Condensed timeline of the Selic rate.

Between March 2021 and July 2025, the Central Bank conducted a rapid reversal of monetary policy: after the Selic rate fell to 2% In March 21, rising inflation necessitated successive rate hikes, with the Copom (Monetary Policy Committee) tightening financial conditions to contain prices and anchor expectations; thus, the rate moved from its historical low and climbed to... consecutive cycles of elevationuntil reaching 15 % In July 25, the highest level of the decade.

This move made credit more expensive, reduced risk appetite, and made clear the role of the Central Bank in preserving price stability, albeit at a high cost to businesses and consumers.

Fiscal pressure, public debt, and the crowding-out effect on corporate credit.

Brazilian tax pressure will become heavier in 2026., because the gross debt of the general government reached 80,1% of GDP in March and interest expenses reached 7,5% of GDP.

Thus, the Treasury absorbs a larger share of domestic savings to roll over liabilities and finance the deficit, while leaving less room for the productive sector to compete for resources under healthy conditions.

As the Selic rate remained high, the cost of carrying public debt increased, raising the perception of risk and reinforcing the crowding out effectin which the state displaces private credit and makes corporate financing more expensive.

Source: Agência Brasil and Estadão, 2026.

Vulnerability of small and medium-sized enterprises in a high-interest rate environment

Brazilian small and medium-sized enterprises will face a much more hostile credit environment in 2026, because the rise in the Selic rate makes working capital more expensive, reduces terms, and increases the requirements of banks.

Furthermore, record default rateThe projected growth of around 8,3% in 2026 puts even more pressure on cash flow and increases the risk of credit limit renewals, receivables anticipation, and short-term loans.

Since SMEs' revenue fluctuates more and their ability to offer guarantees is usually lower, any delay in receiving payments becomes a financial strain.

At the same time, the average interest rate on corporate debt reached 16,79% per year in April 2026, which reinforces the selectivity of creditors and makes it difficult to replenish working capital.

Large corporations, on the other hand, cope better with this scenario because they can access debentures, commercial notes, and capital markets at relatively lower costs, diversifying their funding sources and extending maturities.

Thus, the competitive difference becomes evident.

• SMEs are more dependent on traditional banks and pay higher spreads.
• Large companies raise capital through debentures and reduce their financing costs.
• SMEs suffer more from customer payment delays, while large corporations preserve liquidity.

This asymmetry increases the risk of credit concentration in larger companies and leaves smaller companies more vulnerable to monetary tightening.

Changes in corporate financing structure and persistent risks

Corporate financing in Brazil changed visibly between 2022 and 2026, with the volume of resources increasing by almost 60% in four years and altering the composition of credit sources.

Previously focused on banks, many companies have started seeking issuances, investment funds in credit rights (FIDCs), and other capital market structures, mainly to escape the rising cost of debt.

Still, adaptation did not mean complete relief.

In April 2026, the average cost of interest on corporate debt reached 16,79% per year, pressured by the high Selic rate and a more selective credit environment.

Thus, larger companies gained alternatives, while small and medium-sized enterprises remained exposed to record default rates and more expensive debt rollovers.

decisive factThe increase in financing has not resolved the structural imbalance between access to credit and ability to repay.

At the same time, the public sector also consumed a significant portion of available savings, as the gross debt of the general government reached 80,1% of GDP in March 2026 and public debt interest reached 7,5% of GDP.

Therefore, financial fragility remains and fiscal pressure continues to limit the scope for a more secure recovery.

In shortThe rise in the average cost of interest and the financial difficulties faced by companies in Brazil are creating a challenging scenario.

The need for reforms in credit policies is becoming urgent to guarantee the sustainability and growth of the productive sector.