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Leveraging Business Credit to Navigate Tariff Challenges

Updated: Sep 23

Small businesses across America are facing significant challenges. The recent increase in tariffs has made it much harder for these entrepreneurs to survive. Tariffs on Chinese imports have soared to 145%. There's also a significant baseline tariff on nearly all international goods. This situation has forced entrepreneurs to seek out new financial strategies to manage during this difficult time.


Business credit solutions are emerging as vital tools. They help maintain operations, manage cash flow, and build resilience amid uncertainty. This article explores how various business credit options can support small businesses in navigating the current tariff landscape. It also discusses how businesses can position themselves for long-term success despite trade policy challenges.



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The 2025 Tariff Crisis: Understanding the Impact on Small Businesses


The 2025 tariff crisis reflects a significant disruption in the small business ecosystem. Since early April, companies that import goods have experienced dramatic cost increases. The tariffs on Chinese products have reached a staggering 145%. Alongside these, there's a baseline tariff affecting imports from most trade partners. For small businesses with limited profit margins, these increased costs pose an existential threat.


Many entrepreneurs are facing dire circumstances. For instance, one owner of a Massachusetts-based game company stated, "We only have a limited amount of inventory left, and without some relief, we'll run out soon." Other sectors report equally alarming scenarios, with business owners describing tariffs as "catastrophic" and "devastating" to their operations. Unlike large corporations that may have reserves and diverse supply chains, small businesses often lack the resources to absorb steep cost increases or shift to alternative suppliers quickly.


This crisis has spurred advocacy from major business organizations. The U.S. Chamber of Commerce has called for automatic tariff exclusions for small businesses to avert widespread closures. Suzanne P. Clark, President of the Chamber, emphasized, "As each day goes by, small businesses are increasingly endangered by higher costs and interrupted supply chains that will cause irreparable harm."


Tariffs on Chinese products reaching a staggering 145%

How Business Credit Provides a Financial Lifeline


Business credit can provide several critical advantages to small companies during this period of financial pressure created by tariffs.


1. Cash Flow Management and Flexibility


Tariffs immediately affect cash flow by increasing the costs associated with imported goods. Business credit solutions offer a cushion to manage these heightened expenses without straining working capital.


For example, business credit cards enable companies to manage cash flow more fluidly by allowing delays in payment for purchases. M.J. Hasso, a business card sales manager at U.S. Bank, explains, "Business credit cards can add tremendous value to the operating cycle. They enable more fluid cash flow that, in turn, creates more purchasing power." This flexibility allows businesses to keep running while addressing longer-term strategies to deal with tariff increases.


2. Supply Chain Adaptability Through Financing


Many small businesses are reconfiguring their supply chains in response to tariffs, often requiring substantial upfront investment. Various credit options can finance these adjustments.


Business lines of credit are particularly useful for operational expenses such as inventory purchases and supply chain changes. Unlike traditional loans, these revolving credit lines allow businesses to borrow only what they need when they need it. This helps during the current uncertainty surrounding tariffs, giving businesses the freedom to explore new suppliers or manufacturing alternatives without large lump-sum financial commitments.


3. Building Financial Resilience Through Credit Diversification


Small businesses with established credit profiles have more options when navigating tariff challenges. Maintaining and effectively utilizing diverse credit facilities enables these businesses to build the resilience needed to adapt to the rapidly changing trade environment.



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Business Credit Options for Navigating Tariff Challenges


Several specific credit solutions are particularly valuable during the current tariff crisis:


Business Credit Cards: Flexibility and Rewards


Business credit cards provide immediate spending capacity, along with rewards programs that can help offset increased costs. Key benefits include:

  • Higher credit limits tailored to business needs instead of personal spending capacity.

  • Cash back and rewards programs that can contribute meaningful returns on necessary purchases.

  • Simplified expense tracking and reporting, crucial when managing fluctuating costs due to tariffs.

  • Temporary financing through grace periods between purchases and payment due dates.


For businesses grappling with temporary cash flow hurdles due to tariff increases, business credit cards can offer essential short-term financing along with valuable rewards that may help the bottom line.


Business Lines of Credit: Adaptable Financing for Changing Needs


A business line of credit acts similarly to a credit card but typically offers higher limits and lower interest rates. This revolving credit option is especially valuable during tariff uncertainty because:

  • It provides access to funds for any business necessity that surfaces.

  • Businesses only pay interest on the drawn amount, not the entire credit line.

  • It serves as a financial buffer for unexpected tariff hikes or supply chain disruptions.

  • It offers the flexibility to cover various expenses as businesses adjust their operations.


During unpredictable trade policies, this flexibility equips small businesses with vital adaptability for strategies and cost absorption.


Trade Credit: Supplier-Based Financing


Trade credit, or the ability to secure goods or services from suppliers without immediate payment, can be particularly advantageous during tariff challenges. This type of short-term financing:

  • Doesn’t necessitate traditional financial institution approval.

  • Can improve a business’s credit score when used responsibly.

  • Increases cash flow by delaying payment for goods and services.

  • May assist with applications for other types of business financing.


Negotiating favorable trade credit terms with suppliers can offer small businesses essential financial flexibility amid rising tariff costs.


Inventory Financing: Leveraging Existing Assets


For businesses with significant inventory, specialized inventory financing allows them to use those assets as collateral for loans. This can be particularly useful for:

  • Retailers needing to maintain stock levels, despite rising import costs.

  • Wholesalers purchasing inventory ahead of anticipated price hikes.

  • E-commerce businesses ensuring product availability amid supply disruptions.

  • Manufacturers seeking to secure raw materials before tariff impacts increase.


Inventory financing enables businesses to acquire essential goods without depleting cash reserves, creating flexibility in uncertain trade conditions.


Invoice Factoring: Converting Receivables to Immediate Cash


For businesses feeling cash flow strain due to tariff costs but holding outstanding customer invoices, invoice factoring can provide immediate liquidity. This financing method:

  • Accelerates cash flow by converting accounts receivable into quick funds.

  • Avoids adding to balance sheet debt.

  • Provides capital to address tariff-related challenges.

  • Supports ongoing business growth amid trade headwinds.


Strategic Approaches to Using Business Credit During Tariff Uncertainty


While business credit options offer valuable resources, they must be utilized strategically to maximize their effectiveness during tariff challenges.


1. Implement Cash Conservation Measures Alongside Credit


Experts recommend employing cash conservation measures while exploring financing. This approach ensures credit facilities enhance rather than replace prudent financial management.


2. Use Credit to Secure Inventory Before Additional Increases


With tariffs potentially rising further, using credit facilities to secure inventory at current prices can yield cost advantages. However, businesses should carefully analyze demand forecasts to avoid overextending.


3. Leverage Credit to Explore Supply Chain Alternatives


Credit tools can fund exploration of alternative suppliers or manufacturing setups to minimize tariff exposure. This may include sourcing from countries not subject to high tariffs or investing in domestic suppliers or manufacturing capabilities.


4. Build and Monitor Business Credit Scores


A robust business credit profile enhances access to favorable financing terms, especially crucial during trade disruptions. Regularly monitoring and managing business credit scores should be a priority for small business owners.


Growing Forward


While business credit alone won’t erase the impacts of tariffs, it plays an essential role in a comprehensive strategy for overcoming these challenges. By using different credit options wisely, small businesses can maintain operations, protect cash flow, and adapt to changing trade conditions.


Business owners should consult financial advisors to determine which credit solutions cater best to their situation and specific tariff exposures. Moreover, remaining informed on potential tariff exclusions and trade policy changes is vital, as organizations like the Chamber of Commerce work for small business relief.


Combining careful business credit usage with operational adaptability and strategic planning strengthens small businesses’ resilience during unprecedented tariff uncertainty and sets the stage for success when trade conditions stabilize again.



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At Intenovate Inc, our expertise isn’t just knowledge—it’s application. We’re committed to ensuring your business doesn't only grow but thrives in challenging landscapes. Let us be the catalyst for your success, laying a solid foundation, strategizing expansion, and keeping your business on a steady path toward consistent profitability.




Disclosure:

The insights and recommendations in this series come from thorough research and experience. Every business is unique, and outcomes may vary. For a personalized approach, consider reaching out to our team.


For those who prefer auditory learning or have accessibility needs, we’re pleased to provide an audio version of this article. At Intenovate Inc, we believe in inclusivity and the importance of making knowledge accessible for all.



FAQs


How can business credit help my company during the 2025 tariff crisis?

Business credit provides flexible funding options like lines of credit, trade credit, and inventory financing. This flexibility allows you to manage cash flow, secure inventory at pre-tariff rates, and explore alternative suppliers without draining your reserves.


What makes Intenovate’s Verisyn Capital different from traditional credit building services?

Verisyn Capital is a structured credit-building ecosystem for small businesses. It helps establish tradelines, build a credit score separate from your personal profile, and access vendor and financing tiers that support growth during trade disruptions.


Can I apply for Verisyn Capital if I have poor personal credit?

Yes. Verisyn Capital operates independently of personal credit. We focus on building your business's credit identity from the ground up with reporting vendors, compliance checks, and credit-building tools—even if your personal score is low.


Will using business credit affect my personal credit?

Not if properly structured. Business credit accounts set up through programs like Verisyn will not appear on your personal credit report unless you personally guarantee the debt. We assist in structuring your credit use to minimize personal risk.


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