Tariffs Bring Small Businesses to FinTech Lenders

U.S. tariffs have ushered in a wave of business for lending startups, Bloomberg reported Monday (Sept. 15).

Slope, for example, a company backed by JPMorgan, said applications for its credit lines ballooned by 730% year over year last month, according to the report. The jump came as importers realized that tariffs averaging 50% on Chinese imports would be around until at least November amid negotiations between Washington and Beijing.

“We’ve seen a huge demand spike because of tariffs,” Slope co-founder Alice Deng said, per the report. “The impact was immediate.”

Lending FinTechs flourished during the pandemic but saw loan demand dip when people resumed normal shopping habits, the report said. The tariffs, and the uncertainty that have come with them, are now helping jumpstart their businesses.

Aside from Slope, Dublin-based startup Wayflyer said it saw new loan applications climb 28% between June and July, almost three times the standard seasonal increase, according to the report. Another lender, Clearco, extended 46% more in loans in July and August than it did in the same months last year.

“The U.S. administration’s tariff strategy creates volatility and uncertainty,” Clearco CEO Andrew Curtis said, per the report. “Our clients want to know they have liquidity in case they need to deploy cash quickly.”

PYMNTS earlier this year charted the rise of B2B FinTechs that cater to small- to medium-sized businesses (SMBs), with offerings like embedded finance and real-time cash flow tools.

“In doing so, they are not just unlocking a massive and underpenetrated market, but they are also catalyzing a new wave of innovation in financial infrastructure,” PYMNTS reported April 9. “SMBs are the beating heart of the economy, but they’ve traditionally been treated like an afterthought when it comes to financial services and other innovative product offerings.”

However, advances in open banking, artificial intelligence-driven underwriting and API-first architectures have allowed these lenders to target SMBs at scale in a way that’s practical and profitable.

The report also noted that financial institutions have long had trouble serving SMBs, whose needs are too complex for retail banking, and whose businesses are too small for corporate.

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