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Data on Business Debt Levels and Debt-to-Income Ratios


Business Debt Levels and Debt-to-Income Ratios: An In-Depth Look

Business Debt by Industry

Debt levels and risks vary significantly across industries. Capital-intensive sectors like utilities and real estate operate with higher leverage due to large investments in long-lived assets. Newer industries like technology show more conservative debt usage.

Utilities – Highly capital intensive, with average DTI ratios around 50%. Vulnerable to higher interest rates.

Real Estate – Leverage enables property investments; DTI ratios averaged near 45% pre-pandemic. Exposure to economic cycles.

Oil & Gas – Massive investments needed in wells, pipelines, etc. Above-average debt levels make the sector susceptible to commodity price swings.

Telecom – Large infrastructure costs lead telecom firms to carry significant debt. AT&T and Verizon have DTI ratios approaching 50%.

Healthcare – Hospitals and health systems require major real estate and equipment investments. Leverage has grown in the sector.

Technology – Conservative balance sheets, with giants like Apple and Microsoft holding more cash than debt. DTI ratios under 20%.

Consumer Discretionary – Retailers and leisure firms operate with lower leverage, but are exposed to economic cycles and shifts in consumer spending.

Business Debt by Firm Size

Larger corporations tend to have easier access to financing and operate with lower leverage than small and medium enterprises (SMEs). According to the OECD, SME debt-to-asset ratios exceeded 80% in 2020, compared to around 50% for large firms.

High leverage leaves many SMEs vulnerable to cash flow disruptions. During the COVID crisis, smaller firms were more likely to experience financial distress. However, large firms with significant short-term debt also faced risks when access to commercial paper dried up.

While smaller businesses individually pose limited systemic risk, widespread SME failures could have macroeconomic consequences. More than 99% of U.S. businesses are SMEs, which create two-thirds of net new jobs.


Rising leverage across advanced economy corporate sectors warrants close monitoring by businesses and policymakers. While low interest rates have enabled debt service thus far, high DTI ratios leave firms vulnerable to tighter financing conditions or economic declines. Reducing debt overhangs where possible would provide more cushion, as would enhancing regulatory frameworks to safeguard financial stability. Overall, taking prudent steps to improve debt sustainability can help secure the corporate sector against future shocks.

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