Hit by tariffs, too small for the federal programs: what is left

The federal tariff support is real money, and most small businesses cannot use it. Both of the main programs start at $1 million in annual revenue. If your business is under that, or sells to the US through someone else, the squeeze lands on you with no program behind it.

This guide covers what the programs require, who falls outside them, and when borrowing helps and when it only delays the problem.

What the federal programs ask for

BDC Pivot to Grow lends between $250,000 and $5 million, with interest-only payments for up to 36 months. To qualify, the business needs:

• At least $1 million in annual revenue.
• Three years in business.
• A history of positive cash flow.
• At least 15% of sales from exports to the US, or revenue down (or costs up) by 10% or more because of US tariffs.

The Regional Tariff Response Initiative is run by the regional development agency for your part of the country. Its liquidity stream covers up to half of wages and essential operating costs, such as rent, utilities and insurance, as a non-repayable contribution. It also asks for at least $1 million in revenue, and for a quarter or more of revenue to come from goods that end up in the US.

If you meet those bars, apply there first. Government-backed money with interest-only payments, or money you never repay, is cheaper than anything in the private market.

Who falls through the gap

The programs are built for exporters of a certain size. A lot of the businesses actually feeling the tariffs are not that:

• Smaller exporters, under $1 million in revenue, selling into the US directly.
• Suppliers to exporters, whose customers have cut orders or stretched payment terms.
• Importers, paying more for American goods and parts since Canada's counter-tariffs began.
• Trades and shops that buy US parts, where the price rise lands on every job.

None of these can show 15% of sales going to the US, because the tariff reaches them second-hand.

What working capital can fix, and what it cannot

Borrowing helps with timing. It does not fix margin.

• It helps when the money is coming, just later: a customer paying in 75 days instead of 30, a season that will still arrive, a new buyer you have lined up while the US order book is quiet.
• It helps when buying now is cheaper than buying later: stock or parts bought before a price increase you can see coming.
• It helps when it pays for the move away from the problem: a new market, a new supplier, equipment that cuts a cost.
• It does not help when the tariff has permanently taken away the profit on what you sell. Borrowing to cover a loss you will make every month just makes the loss bigger, plus the cost of the money.

Before you borrow, write down in one line how the money comes back. If the answer depends on the tariffs going away, wait.

Questions to answer first

1. How much is the gap, and for how long? Borrow the gap, not a cushion. How much can my business borrow shows how lenders size it.
2. Is it a lump or a timing problem? A one-off purchase suits a term loan. Months that swing suit a line of credit, because you only pay for what you draw.
3. What does it cost in dollars? Compare offers on the total you repay, not the payment. What working capital costs explains how, and the business loan calculator does the arithmetic.
4. Can you carry the payment in a bad month? Test it against your slowest month this year, not your best.

Where we fit

We are a broker, not a lender and not a government program. You fill in one application, and we take it to the lenders we work with, for amounts from $5,000 to $2,000,000. The total you repay is shown in dollars before you decide. The lender pays us, not you, and applying does not affect your credit.

If you qualify for the federal programs, use them; they cost less than anything we can arrange. If you do not, and the problem is timing rather than margin, apply here and we will tell you what is available.

For how the banks, BDC and alternative lenders compare in general, see bank, BDC or broker. If payroll is the pressure point, see covering payroll.