Trump tariffs: Small businesses take on high-interest rate loans to cover new costs

Core Viewpoint - Small businesses are facing financial distress due to high-interest loans taken to cover the costs of new tariffs imposed by the Trump administration, with fears of long-term financial consequences even if the tariffs are deemed illegal [1][2][5]. Group 1: Impact of Tariffs - U.S. Customs and Border Protection reported over $200 billion collected in tariffs this year due to new duties [3]. - Business owners are resorting to high-interest merchant cash loans, with rates exceeding 30%, to manage tariff-related expenses [2][4]. Group 2: Financial Strain on Businesses - Companies are experiencing aggressive lending practices, with some owners reporting daily solicitations from high-interest lenders [4]. - One business, The Cut Buddy, borrowed $950,000 to cover $800,000 in tariffs, incurring additional fees and high-interest rates between 24% and 30% [5][6]. Group 3: Alternative Financing Solutions - The Business Consortium Fund provided a new loan to help a business consolidate high-rate payments, reducing weekly payments from $35,000 to $35,000 monthly, although still considered high [7]. - The financial assistance was crucial in preventing the business from shutting down, highlighting the severe impact of predatory lending on small enterprises [8].