Earnings See Businesses Embrace Working Capital Flexibility as Growth Pauses

U.S. reciprocal tariffs have upended global trade.

Once fluid supply chains are now tangled with complexity, and the ripple effects are being felt across every corner of the business world, from procurement and logistics to pricing, profitability and working capital.

As a result, the most recent earnings commentaries and industry analyses point to companies being forced to rethink how they manage their finances, with particular emphasis on working capital. Amid heightened uncertainty, many are shifting from just-in-time inventory strategies to more resilient, cash-preserving approaches, aiming to weather prolonged periods of market turbulence.

Businesses that proactively manage their working capital could stand to gain a competitive advantage in today’s shifting environment. Earnings results reveal that flexibility and liquidity are now the name of the game.

Read also: How Payments Innovation Underpins All-Weather Businesses and Resilient Supply Chains

The prevailing attitude among lenders was that while the macroeconomic picture remains cloudy, businesses are taking a wait-and-see approach to investments, meaning that flexibility of working capital solutions remains key.

KeyBank said Thursday (April 17) that average commercial loans were up 0.4% quarter over quarter in the period ended March 31, to $72.4 billion.

“If [businesses] have a capex project that’s in flight, full speed ahead,” CEO Chris Gorman said. “The last 90 days haven’t changed a thing because those are planned and committed long before they start.”

“In terms of new projects being launched, until there’s more clarity, I think obviously the current environment hinders that,” he added.

Fifth Third Bancorp Chairman, CEO and President Tim Spence said Thursday that he traveled to meet with around 50 business owners in the five regions served by the bank in sectors like materials, manufacturing, transportation, logistics, energy, automotive and healthcare to get their views on tariff announcements.

“What was maybe a little bit interesting to me is that the folks that have domestic supply chains were also saying they have to move prices in the U.S. because they’re expecting that if the tariffs hold, they’re going to experience volume losses in foreign markets, and … they require a certain amount of gross margin dollars just to be able to cover overheads and run their businesses,” Spence said.

On the commercial side of Bank of America’s business, commercial loans were flat from the end of the year at $196 billion.

CEO Brian Moynihan said Tuesday (April 15) that businesses are “basically sanguine on the current environment, but they’re worried about how [tariffs] will affect their businesses and where they should invest. And I think that’s slowing down some of their decision paths right now because they’re trying to figure out, ‘For my goods and services, will I be able to pass through the price? Do I need [to] change my business plans in terms of growth? Should I buy that piece of equipment?’ That’s why line usage has been relatively muted still, and we continue to try to grow it.”

PNC gained customers and commercial loans in the first quarter, expanding its net interest margin and capital levels and maintaining credit quality metrics, CEO William Demchak said Tuesday.

Commercial and industrial (C&I) loan commitments increased by $4.7 billion, consumer loans declined by $1 billion and commercial real estate (CRE) loans decreased by $1.3 billion. Spot utilization in the commercial and industrial banking (C&IB) business increased by about 80 basis points during the quarter.

For Wells Fargo, the commercial loan book showed modest growth for the first time since early 2023, indicating renewed demand despite economic uncertainty. Treasury management and tax credit investments also contributed positively, reflecting innovation in corporate financial solutions.

American Express Chairman and CEO Stephen Squeri acknowledged Thursday that if the economy takes a severe turn, small businesses might feel the pinch first, but he said the company would not abandon its forward-looking strategy. His view is supported by data in the PYMNTS Intelligence report “Brewing Storm: Why 1 in 5 Smaller Businesses Without Financing Fear They May Not Survive Tariffs.”

The common message from first-quarter 2025 earnings was to keep liquidity abundant, credit underwriting tight, and technology spending pointed at areas that either cut cost (digital onboarding) or expand fee income (real-time payments, commercial cards). If the tariff picture brightens, banks are positioned to accelerate; if it darkens, they have the reserves and operating leverage to endure.

“We need high-growth businesses to survive and thrive [in this uncertain economy],” Lucy Demery, senior vice president, head of Visa Commercial Solutions, Europe, told PYMNTS in February, noting that embedded options are proving to be a “huge unlock for supply chain payments.”

Working capital innovations are helping businesses plan for the future while simultaneously navigating today’s complexities. In sectors like manufacturing and retail, where delays can cascade into million-dollar losses, the speed and reliability of payments can mean the difference between resilience and ruin.

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