The ongoing uncertainty over international tariffs levied by the Trump administration has led to financial worries for many small businesses, though experts say many small firms will weather the turmoil without much trouble.
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The ongoing uncertainty over tariff policies has become a major problem for a wide swath of the U.S. small business community, a new white paper released this week before the Trump administration replaced expiring international tariffs with new levies on 80 nations, asserts.
In its report, Crux Analytics, a small business banking platform, cites a 67% spike in small business bankruptcies in the first quarter of 2026; an increase in “emergency loan” and “cash flow” searches on Google by small firm owners; and a jump in Small Business Administration lending during the 2025 fiscal year combined with a decrease in traditional bank business lending. All that, Crux analysts conclude, adds up to a historically anxious atmosphere for the small business community.
The most likely culprit, the white paper asserts, is the “whiplash” from ever-changing U.S. international tariff policies, which were upended in February when the Supreme Court invalidated some of the Trump administration tariffs that were implemented last year. But the president immediately instituted a new set of temporary stopgap tariffs the same day that the Supreme Court struck down the initial wave of levies. On July 24, those expired and were replaced by new permanent tariffs.
Small business owners haven’t been able to shake off the effects of the months of uncertainty caused by the tariff drama, says Jacob Bennett, CEO of Crux. “This is really a story about volatility,” he says. “We can find clear wins in recent tariff policy, but when it comes to individual small businesses … they have basically been operating in an environment where they don’t know how things are going to change, sometimes on a daily basis. And it’s really that whiplash effect that has caused this rising anxiety, that has caused real business collapse in some cases.”
The report further cites the most recent Fed Small Business Credit Survey, an annual survey of businesses with less than 500 staffers, which found that 77% of small businesses reported rising costs as a primary business hurdle, including 40% that specifically said tariff-related costs were a major issue, particularly for manufacturers and retailers. The survey also found that 60% of small businesses applied for some kind of financing in the previous 12 months, with 56% of them looking for loans to continue day-to-day business operations, while just 46% wanted capital to fund expansion plans.
In the 2025 fiscal year, the SBA dispersed a record $45 billion from its 7(a) and 504 loan programs, with a total of more than 84,000 loans, which the Crux report interpreted as “a flight to government-guaranteed credit.”
The Crux report also pointed out that small business bankruptcies shot up by 67% year-over-year in the first quarter of 2026 to 833 from 499 in the same quarter last year, and that total business bankruptcies were up 14% year-over-year, to 8,436 from 7,375. (There are roughly 36.2 million small businesses in the United States.)
And the report noted that a good number of small businesses are turning in desperation to expensive merchant cash advances, or utilizing high-interest credit cards or other pricy sources of cash that may only create more long-term debt problems.
“One of the big things we were looking at is people looking for emergency capital, essentially,” Bennett says. “They’re trying to figure out, how do we do whatever we can to put ourselves in the strongest position, regardless of what happens? For many, that means shoring up as much capital as possible. And unfortunately, in many circumstances that capital is not the healthiest capital.”
The bottom line, Bennett says, is that the overall financial picture may worsen after July 24th’s tariff policy change for a number of small businesses across the U.S.
“What we see in the numbers is anxiety at levels that hasn’t really existed historically across the small business economy,” Bennett says. “The worst-case scenario is these numbers don’t reverse, and the economy very quickly feels the effect.”
But some other professionals who work directly with small businesses say they’re not nearly as worried as Bennett is.
“This change in tariff policy, I don’t know if it’s going to move the needle that much. I’m skeptical,” says Ami Kassar, CEO of Multifunding, a Philadelphia-based SBA deal broker. Kassar says his business is poised to grow by between 80% and 100% this year over 2025, because there’s been so much demand from his small business client base for new SBA loans.
“There are definitely some businesses that are having a tough time and struggling… and there are some businesses that are cruising along at 100 miles per hour and everything is fine,” Kassar says. “I don’t think of it necessarily as a macro trend.”
Kassar specifically took issue with the Crux Analytics report’s citation of small business bankruptcies shooting up in the first quarter of the year. It’s an unreliable statistic, he said, because due to the average cost of $30,000 to $50,000 of filing for business bankruptcy, most small firms don’t even usually bother with the paperwork. “They usually just shut down,” he says.
“My suspicion is that a lot of the people that are buying businesses and funding them through us, they’re feeling super positive about the economy,” he adds.
But attorney Scott Oliver, a partner at Lewis Kappes in Indianapolis, tells Forbes that he thinks the Crux report isn’t surprising, though it did hit a nerve.
“If anything, it’s putting data behind some of the conversations that we’ve been having with lenders, borrowers, people at the firm for quite some time,” Oliver says. “Working capital management has become a much bigger focus (for small businesses), especially over the last couple of years.”
But Oliver cautions against reading too much into the Crux report’s conclusions regarding small firms using SBA lending to “survive rather than to grow,” and pointed out that the SBA has always been ready to lend to small businesses that need operating capital.
“The cash crunch, I think, is real,” Oliver says. “A lot of businesses, when they see tariffs, when they see these increases in the future, there could be a projectional cash crunch that could cause them to make decisions based on uncertainty.”
Oliver points out that the Crux Analytics report also failed to mention that there are subsets of specific SBA loan programs that are designed to provide cash to small businesses to help pay for day-to-day operations, even within the 7(a) loan program. Those include the SBA Express, Export Working Capital and CAPLines programs, Oliver says.
For small businesses that may be panicking over tariff-related expenses, Oliver says which loan to pursue very much depends on the amount of assets and collateral a business has on hand, but that the SBA has “tailored loan solutions … that fit small business’ particular needs.”
Oliver also suggested that a certain level of small business owner anxiety is not only normal, but healthy, to keep business owners wary of potential pitfalls coming down the pike. And, he says, some of the stats in the report – such as the bankruptcy numbers – were somewhat misleading in the context of possible tariff panic.
“I’m not really considering the current environment as one where healthy small businesses are collapsing en masse,” Oliver says. “It’s more of an environment where uncertainty’s increasing the demand for capital. Businesses are having to finance higher inventory costs, absorb pressure. … But that’s very different from saying they are fundamentally unhealthy.”
Rand Larsen, the founder and president of small business peer advisory group Scalepath, also says he’s not overly worried about the impacts from tariffs to his roughly 100 members, though he notes that manufacturers are likely to be in for a tough spell, and he singled out the theme of “uncertainty.”
“That word, ‘uncertainty,’ it’s sort of been the word for the last year or two,” Larsen says, adding that he just this week polled his members on their attitudes towards the American economy, and the average response was “cautious.”
“It just seems like people are broadly scared to spend money,” Larsen says. “And it doesn’t necessarily come down to a direct reason.”
That said, Larsen adds, getting ahold of operating capital has not been any real issue for any of the small businesses that are part of Scalepath. “If they want to raise equity or debt, it’s usually there,” Larsen says. “It’s never seemed to be a problem, where they need to access debt or equity, it usually comes out of cash or an existing credit line.”
The reality for American small businesses these days is a gray area somewhere in between panic mode and total confidence in the economy, Larsen says.
“It’s not like they see sunshine and rainbows,” Larsen says. “That picture isn’t really in sight. But nevertheless, their companies are going to grow through it … I don’t think anyone’s going to go bankrupt anytime soon.”
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