Currency volatility costs internationally trading SMEs £71,600 on average – Bibby Financial Services
SMEs trading internationally have lost an average of £71,600 in the past 12 months due to currency volatility driven by the Iran War and US tariffs.
Small and medium-sized enterprises (SMEs) trading internationally have lost an average of £71,600 in the past 12 months due to currency volatility driven by the Iran War and US tariffs, according to data from Bibby Financial Services.
Its Trading Places report found 69% of SMEs said international trading conditions had increased pressure on cashflow.
Late payments from overseas customers affected 29%, while 26% saw a rise in international customer insolvency, raising the risk of bad debt.
Seven in 10 SMEs said they are at significant or moderate risk of entering administration if geopolitical tensions continue.
Theo Chatha, CFO and managing director of specialist finance at Bibby Financial Services, said: “Unpredictable international trading conditions are stifling small businesses’ ability to grow and survive.
“Vast sums are being lost to volatile conditions, whether through currency fluctuation or more directly via the rising costs and disruption caused by the Iran War and US trade tariffs.
“Small businesses need the Government to help mitigate uncertainty by strengthening trade relationships with the EU and taking tangible measures to reduce trade friction.”
Chatha added: “This action is needed immediately – every delay puts more businesses at risk.”
While 84% of small and medium-sized enterprises said they feel confident their business understands foreign exchange (FX) risks, 43% have no proactive FX strategy and 49% said no one in their business has significant experience or training in managing one.
Chatha said: “A non-proactive approach to managing currency only puts businesses’ margins in the firing line.
“The businesses best placed to win amid this volatile trading environment are those with a strong FX strategy, allowing them to plan, hedge and budget with confidence – mitigating currency fluctuation and enabling growth.”
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