If your business trades across the border, or buys parts and inventory that eventually cross it, you are probably feeling the pressure already. Costs are changing, suppliers are sending revised quotes, and customers are taking longer to place orders. None of it necessarily looks like a crisis on its own, but together, these changes can put a serious strain on cash flow.
That is the part of the tariff dispute that matters most to a small business owner. It is not just about the percentage attached to a tariff or what happens in the next round of trade negotiations. It is about what you have to pay today and when you can expect to get that money back.
The Trade Situation in Plain Terms
Canada and the U.S. have been dealing with an escalating tariff dispute through the second half of 2026. The U.S. imposed a 50 per cent tariff on $27.6 billion of Canadian goods effective August 22. Canada responded with counter-tariffs on U.S. goods effective September 8, with rates of 15, 25 and 50 per cent depending on the product. According to QualiVests, Canada suspending talks, the U.S. tariff hike, and Canada's reciprocal response, has left small business owners on both sides of the supply chain absorbing higher input costs with very little warning.
Not every Canadian business is directly affected by these measures. The impact can still spread through supply chains, supplier pricing, inventory costs and customer demand.
For businesses that are directly exposed, the financial effect can arrive before the revenue does. An importer may face higher costs when bringing goods into Canada, while the business may not collect payment from its customer until weeks later. A contractor may have already priced a project when the cost of materials changes. A retailer may have to pay more for inventory that will not generate revenue until it reaches the shelf and sells.
That gap between paying more and getting paid later is where cash flow can become a problem.
Why This Hits Working Capital
Business owners often notice tariff pressure first through their margins. The cost of goods goes up, but the price charged to customers may not be easy to change overnight.
Working capital can take an even bigger hit.
A restaurant sourcing specialty ingredients or equipment from the U.S. may have to absorb a higher landed cost before those purchases generate any revenue. A retailer bringing in seasonal inventory has to fund that inventory before a single unit is sold. A construction company working under a fixed-price contract can find itself facing higher material costs on a job that was quoted before the tariff was introduced.
The business may still be profitable. The problem is the timing.
If more cash is tied up in inventory, materials or other operating costs, there is less available for payroll, rent, supplier invoices and other expenses that continue to come due.
A business does not have to be losing money to have a cash-flow problem.
The Numbers Back This Up
The impact is showing up in the numbers as well as in individual businesses.
According to the Canadian Federation of Independent Business, a September 2026 survey of 1,545 independent business owners found that 46 percent of Canadian exporters selling to the U.S. are affected by the new U.S. tariffs. Among Canadian importers sourcing from the U.S., 49 per cent reported being affected by Canada's retaliatory tariffs.
Among businesses reporting an impact, the median added monthly cost was $65,000.
For a small or mid-sized business, that kind of additional monthly expense can put substantial pressure on working capital. Even businesses with healthy sales can find themselves needing more cash simply to maintain the same level of operations.
Where Private Financing Fits
A tariff-related cost increase does not necessarily mean the underlying business is in trouble. Sometimes the business simply needs enough working capital to get through the period between a higher expense and the revenue that follows.
A merchant cash advance can be one option for businesses in that position. Rather than waiting for a traditional financing process, a business can use its future sales to access working capital now.
This can be useful for businesses dealing with higher inventory costs, increased material expenses or other short-term pressure created by changing trade conditions.
Restaurants, construction companies, retailers and trucking businesses can all face this kind of timing issue, although the specific costs will vary from one business to another.
The goal is not to use financing to cover a business that cannot support itself. It is to give an otherwise viable business more room to manage a temporary cash-flow gap.
Bad Credit Does Not Mean You Are Out of Options
Some business owners dealing with higher costs are also carrying credit challenges from previous years. Pandemic-era debt, higher borrowing costs and uneven receivables can all affect a business owner's credit profile.
Traditional lenders may put significant weight on credit history when assessing an application. Alternative financing can take a broader view of the business.
At 2M7, factors such as business revenue, time in business and overall performance can be considered alongside credit history. That means a lower credit score does not automatically mean there are no financing options available.
Every application is different, and approval is not guaranteed. The important point is that credit history does not necessarily tell the whole story of how a business is performing today.
The Bigger Picture for Owners
Tariff disputes are usually discussed as a matter of international trade, government policy and economic forecasts. For a small business owner, the immediate concern is often much simpler.
It is the supplier invoice that has gone up. It is the material order that now costs more than expected. It is the inventory that has to be paid for before it can be sold. It is payroll at the end of the week.
Government programs can provide valuable support, and businesses affected by the current trade measures should explore what they may qualify for. But it is also important to look at the cash-flow problem itself and understand what options are available before the pressure becomes critical.
If tariffs or higher cross-border costs are putting pressure on your working capital, 2M7 can help you explore your financing options. We fund merchant cash advances directly, with no broker in the middle, giving Canadian business owners an alternative to traditional small business financing when they need access to working capital quickly.
Contact 2M7 today to find out what you may qualify for.
