---
title: "Trump's tariffs squeeze small businesses, some turn to high-risk cash advance financing"
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/294434459.md"
description: "Trump's tariff policy has increased the operating costs for small businesses in the United States, forcing some companies to turn to high-risk merchant cash advance (MCA) financing. Data shows that the proportion of businesses applying for MCA will rise to 12% by 2025. Although the Supreme Court's overturning of some tariff measures has alleviated pressure through refunds, the high financing costs still leave businesses with tight cash flow"
datetime: "2026-07-31T01:03:59.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/294434459.md)
  - [en](https://longbridge.com/en/news/294434459.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/294434459.md)
---

# Trump's tariffs squeeze small businesses, some turn to high-risk cash advance financing

President Trump's tariff policy has increased the operating costs of many small businesses in the United States. Trump introduced a new round of tariff measures last week, which took effect on July 24, prompting some businesses to turn to high-risk financing.

The annual Small Business Credit Survey released by the Federal Reserve in March showed that the proportion of businesses applying for loans, credit lines, or cash advances in 2025 was 38%, roughly in line with the past few years. However, the percentage of businesses applying for Merchant Cash Advances (MCA) rose from 9% in 2024 to 12% in 2025. MCA is a financing agreement where lenders provide cash to businesses upfront in exchange for a portion of future sales revenue. This type of financing can assist businesses in urgent need of funds, but the costs are typically quite high.

The increase in MCA applications coincides with the tariffs from Trump's second term taking effect in April 2025. Aharon Margolin, who works in the alternative financing industry, noted that he has seen an increase in financing demand across various sectors, particularly through MCA financing.

Margolin established the Tariff Recovery Group in Los Angeles in February this year to assist businesses in applying for tariff refunds. He stated that importers are directly bearing the pressure from tariffs, with tariff payments significantly increasing, impacting cash flow and profitability.

He also pointed out that even businesses not dealing with imported goods are facing rising costs. For example, a coffee shop he contacted reported that prices for various goods have become higher, tightening cash flow and necessitating additional funds.

After the U.S. Supreme Court overturned Trump's original tariff measures implemented under the International Emergency Economic Powers Act in February, some businesses began to receive refunds.

Margolin indicated that he could not confirm whether clients of the Tariff Recovery Group used refunds to pay off MCA debts, but when funds are received, business owners generally feel a sense of relief. He stated that businesses are under pressure, and the return of refunds feels like a lifeline for them. (su)

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