The Impact of the Iran Conflict on SMEs: Rising Costs, Disrupted Trade, and Tighter Finance

Geopolitical shocks are reaching small and medium-sized enterprises faster than ever. According to a recent analysis by Trade Finance Global, the conflict in Iran has disrupted shipping routes through the Strait of Hormuz and pushed up global energy prices, with knock-on effects across supply chains, transport costs, and supplier pricing.

For SMEs, the consequences are particularly acute: longer cash conversion cycles, delayed payments, and tighter liquidity, compounded by rising financing costs and currency volatility. Unlike larger companies, SMEs typically lack the buffers to absorb these combined pressures, driving increased demand for trade finance tools such as receivables and inventory financing.

The article argues that resilience for SMEs now depends less on scale and more on agility — flexible financing, careful cash flow management, and treating currency and counterparty risk as core operational priorities rather than back-office concerns.

Furthermore, several articles are debating on the knock-on effects the war is having on SMEs in UK in particular. A report by SME funder Bibby Financial Services (BFS) – which surveyed over 500 UK importers and exporters – revealed that 74% of SMEs reported facing direct disruption from the Iran war.

As a result, businesses have reported an average loss of £38,207 since the start of the crisis, with 70% of SMEs now fearing bankruptcy. More than half (55%) also consider themselves to be in a more uncertain position now compared to when Russia invaded Ukraine in 2022.

Read the full article on Trade Finance Global