Small businesses adapt strategies as global trade uncertainty grows
Australian small and medium-sized enterprises (SMEs) are contending with heightened global trade uncertainty, particularly as changes to US tariffs impact exporters.
Those sending goods to the United States, especially products manufactured in China, now face a 30% tariff in addition to a 10% baseline rate.
“Despite an uncertain global trade environment, many Australian SMEs are adapting by shifting to alternative markets, renegotiating supply chains, and, in many cases, turning to alternative finance,” said Guy Callaghan (pictured), chief executive of Banjo Loans. “Financial pressure is real and front-of-mind, but it’s being met with smart strategy.”
Recent data from Banjo Loans indicates that SMEs exposed to the US market are actively seeking new opportunities and adjusting their operations. The Banjo Barometer report for the June quarter shows that sectors with significant international trade exposure – such as transport, wholesale, and manufacturing – experienced marked increases in loan approvals. This trend suggests that businesses are responding to tariff disruptions with strategic planning and investment.
“We’ve seen some businesses abandon US expansion plans and pivot to markets like the UK, EU or New Zealand,” Callaghan said.
Loan approvals through Banjo Loans rose by 22% in the fourth quarter of the 2025 financial year, representing the highest quarterly growth in SME borrowing for the period. The increase was most pronounced in supply chain-dependent industries. Transport, postal and warehousing saw a 38% rise. Wholesale trade increased by 72%. Accommodation and food services grew by 28%, partly due to changing supplier costs.
The report also found that 44% of SMEs are engaged in international shipping, with 40% of these still relying on Chinese manufacturing.
“While some SMEs have paused their US expansion, watch whether exporters outside the US – China in particular – start discounting to offload goods once destined for America,” Callaghan said. “That could give importing Australian SMEs a strong tailwind.
“Others are sticking with US customers but reworking margins, logistics and pricing. Either way, they’re moving fast and, in some cases, using funding to do it.”
Despite signs of resilience, the report also recorded an increase in arrears during the fourth quarter, especially among businesses with annual revenue below $2 million. Many of these firms continue to face challenges from ATO debts and rising operating costs. Slower economic conditions are also affecting some sectors.
“It’s a tough environment, but not one without opportunity,” Callaghan said. “The SMEs who act quickly, to diversify markets, secure better input costs or restructure funding, are the ones we expect to come out stronger.”
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