Analysis presented by Bridge Business Credit

The war in Iran is accelerating higher borrowing costs and tightening credit, hitting manufacturers, distributors, staffing firms, and business services hardest through stretched receivables and rising input expenses.

Traditional bank lines are more expensive and restrictive, pushing companies to rethink cash conversion cycles and treat invoices as a strategic funding asset rather than just an accounting entry.

Currently, the U.S. borrowing landscape is defined by a “liquidity divide.” As the conflict in Iran drives oil prices to record premiums and reshapes global supply chains, American businesses are finding that traditional access to capital has fundamentally shifted from a reliance on credit history to a battle for collateral value.

As this financial struggle continues to take shape and evolve, Bridge Business Credit is closely monitoring the various international (and national) impacts on business financing. As an example, according to business-financial broadcaster CNBC, these impacts can be found hitting businesses in a number of critical ways:

Tightening Credit Standards: Lenders are increasing scrutiny of creditworthiness due to rising uncertainty, with some previously acceptable applicants being rejected.

Higher Borrowing Costs: The war is fueling inflation, which has pushed up interest rates, making bank lines of credit and term loans more expensive for businesses. Meanwhile, as inflation rises, the Federal Reserve is delaying rate cuts, keeping borrowing costs high. 

Working Capital Squeeze: B2B companies are facing tighter liquidity due to rising input costs and slower cash flow, as customers seek longer payment terms.

Alternative Financing Increase: Due to restricted bank lending, many businesses are turning to alternative methods, such as accounts receivable factoring, to maintain cash flow.

Sector Specific Impact: The pain is most acute in industries reliant on transportation and energy, with shipping complications causing significant delays.

The news service Thomson Reuters identifies these industry-specific impacts:

Agriculture and Transportation: These sectors are most vulnerable due to rising fuel costs, with some reporting, for example, a 25% surge in fuel spending.

Supply Chain Disruption: Shipping rerouting via the Cape of Good Hope has created logistical delays, increasing operational costs for firms dependent on imports/exports, making them higher-risk borrowers.

Startup Companies: Investors are reducing valuations by 20% to 40% in some scenarios, focusing on companies with high operational efficiency rather than just growth.

Defense & Manufacturing: While logistics and transportation firms faced an 8% decline in lending volume in early 2025, small manufacturers are seeing a reprieve with a 2026 SBA initiative that waives most loan fees to incentivize domestic production.

Logistics & Construction: These sectors report the highest anxiety over cash flow, as high fuel costs and interest rate spikes make debt servicing increasingly difficult.

The Rise of “Just-in-Case” Financing

The war in Iran has forced a pivot from “just-in-time” to “just-in-case” inventory management. Financing these larger stockpiles has turned Asset-Based Lending (ABL) into a vital strategic tool for U.S. firms.

• Inventory as Capital: With shipping bottlenecks in the Middle East, businesses are borrowing heavily against surplus raw materials. However, banks have grown wary, often capping inventory advance rates at 50% (down from a typical 60%) to buffer against potential price volatility or obsolescence.
• Collateral Compression: Rising import costs and “conflict surcharges” on logistics are squeezing profit margins. Lenders often view this margin compression as an erosion of collateral quality, leading to reduced credit availability for electronics and manufacturing sectors.

Alternative Lifelines: Fintech and Private Credit

As traditional banks retreat, non-bank and fintech lenders have captured a massive share of the U.S. market, serving as the primary source of funding for 72% of businesses in late 2025.

• Fintech Flexibility: Online lenders are competing on speed and “flexible underwriting” that prioritizes real-time cash flow over stagnant credit scores.
• Embedded Finance: U.S. firms are increasingly bypassing banks entirely, using embedded finance tools from platforms like Shopify or QuickBooks to access instant, integrated loans.
• The Quality Shift: Interestingly, the market is seeing a “flight to quality.” Even among alternative lenders, applicants approved in 2025 showed higher average FICO scores (665) and larger bank balances ($378,000) than in previous years, suggesting that only the healthiest firms are securing top-tier terms.

Conclusion

Accessing business loans in the U.S. today requires more than a solid track record; it requires a balance sheet heavy with “hard” assets and a willingness to look beyond the local bank branch. For firms that can prove the value of their inventory and receivables, the liquidity is there—but it comes at a premium that reflects a world rocked by war.

At Bridge Business Credit, we understand the threats to financial stability and offer solutions that can help your company navigate the complex challenges when global events impact trade routes, supply chains, inventory, and more.

If you want to better understand these issues and discuss strategies to maintain a strong and highly competitive company, we are available any time.