SMBs Tap Working Capital to Fuel Agility by Aligning Financing and Procurement

Small– to medium-sized businesses (SMBs) face the ongoing challenge of how to compete on cost without compromising quality or compliance, particularly against today’s backdrop of global uncertainty.

In 2025, merely mastering the fundamentals of procurement is no longer enough.

Volatile trade policies, persistent supply chain disruptions and rising financing costs have forced procurement leaders to rethink not only where they source but also how they fund their sourcing decisions. At the heart of this shift is working capital innovation.

Traditionally, working capital optimization was viewed as the enterprise chief financial officer’s domain as an exercise in shortening receivables, stretching payables and managing inventory. Today, it is emerging as a cross-functional lever for mid-sized firms that can connect procurement strategy, trade compliance and global sourcing decisions.

When procurement leaders have visibility into the financing options available, they can be bolder in reshaping supplier networks in response to tariff shifts. Conversely, finance teams gain better forecasts and risk management by understanding the tariff-driven volatility in sourcing costs.

When SMBs find it hard to breathe, working capital innovation can be a lifeline.

Read also: Will Tariffs Force Small Businesses Off the Global Stage?

For decades, the narrative of supply chain optimization revolved around lowering unit costs and minimizing lead times. SMBs often played catch-up with larger competitors that could demand favorable supplier terms and invest in sophisticated procurement technologies. Yet even as SMBs improved their sourcing intelligence, many remained constrained by liquidity.

This constraint has grown more acute in recent years. Higher interest rates have made borrowing more expensive, trade disruptions have tied up cash in transit, and fluctuating tariff regimes have created unplanned duties that must be paid up front at ports of entry. For businesses operating on tight margins, the working capital locked in these friction points can mean the difference between seizing an opportunity and standing still.

Priority CEO Tom Priore told PYMNTS in April that, regardless of the economic environment, SMBs are constantly forced to make their way through an ocean of complexity. Bundled financial services can help them speed cash flow and optimize working capital.

The payoff is agility. Companies that treat working capital as a living lever rather than a static metric can reallocate resources quickly in response to tariff changes, supplier disruptions or shifts in demand. They are better equipped to align procurement strategy with near-term liquidity needs and long-term competitive goals.

“There’s a lot of change going on, and it all centers around working capital,” David Bork, senior vice president, Boost 100 Business Development, at Boost Payment Solutions, told PYMNTS in May.

“The Growth Corporates Working Capital Index 2025-2026,” a Visa report published in collaboration with PYMNTS Intelligence, found that working capital efficiency can unlock $19 million in average savings for middle-market companies.

See also: Trade Finance Automation Looks to Recode Supply Chain Payments

Shifts in trade policy, logistics technology and customer expectations have made adaptive supply chains a practical necessity for SMBs. Central to this evolution is a renewed focus on end-to-end visibility, or the ability to see and interpret risks and opportunities from the source of raw materials all the way to the customer’s doorstep.

A key enabler in this process is the U.S. International Trade Commission’s constantly updated Harmonized Tariff Schedule (HTS). While many SMB executives might consider tariff codes the domain of customs brokers and trade lawyers, the HTS has become a real-time indicator of vulnerability in global procurement. As new trade agreements shift tariff regimes, firms that use the resource strategically can expose weak points in their sourcing networks and respond before disruptions cascade into production or delivery failures.

Technology plays a decisive role in making these insights actionable. Many SMBs still conduct scenario planning in Excel, an accessible but often limited tool for modeling the interplay between tariffs, shipping times and component costs. Larger firms integrate these variables into enterprise resource planning (ERP) systems that can model multiple scenarios in near-real time.

Yet the gap between spreadsheet and ERP is narrowing. Affordable cloud-based analytics platforms now allow mid-sized manufacturers and retailers to simulate how a tariff adjustment or shipping delay in one region will ripple through their operations.

The PYMNTS Intelligence report “Platform Power: The Growing Importance of Embedded Finance to SMB Success” found that about 90% of SMBs said access to embedded finance is essential to their daily operations.

For SMBs, this environment is challenging and full of opportunity. Those that combine tariff-savvy procurement with innovative working capital solutions could adapt faster, seize market share during disruptions and invest in growth even in uncertain conditions. Capital efficiency may prove to be the defining competitive moat in the next era of global commerce.

Register for the upcoming B2B PYMNTS 2025 event, “B2B.AI: The Architecture of Intelligent Money Movement,” taking place Oct. 6 to 31.

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