How Canadian SMBs Can Adapt to Rising Interest Rates in 2025
By Robert Marshall
August 19, 2025
How Canadian SMBs Can Navigate Rising Interest Rates in 2025. Practical Vendor Partnerships on CanDo
Canadian small and medium-sized businesses (SMBs) are under pressure from rising borrowing costs. Interest rates remain high in 2025, making loans and credit lines more expensive and tightening access to capital. Intuit QuickBooks’ Annual Report notes that employment among SMBs has fallen by tens of thousands since mid-2024, and businesses that rely heavily on bank loans have reported significantly slower revenue growth. Those leaning on credit cards are facing long-term cost risks that eat away at margins.
Float’s 2025 SMB Financial Outlook highlights a widening divide. Older, established companies are better positioned to weather rate hikes, while newer firms often struggle with cash flow management. The result is a two-speed economy that forces small operators to look for every possible advantage in controlling costs and securing reliable partnerships.
Trade uncertainty compounds the issue. Canadian Federation of Independent Business surveys show a third of businesses have already shifted their sourcing to Canadian suppliers, with another third planning to reduce U.S. reliance. In B.C., more than half of firms are willing to leave long-time U.S. suppliers if it means avoiding disruption, even when local sourcing costs more.
Strategies for Adapting—Partnerships That Make a Difference
Work with vendors offering flexible terms
Extended payment options, in-house financing, or leasing arrangements ease strain on working capital.
Strengthen ties with Canadian suppliers
Local partners reduce exposure to tariffs, shipping delays, and policy shifts while supporting predictable supply.
Build purchasing consortiums
By joining forces with other SMBs, businesses can negotiate bulk discounts and share logistics to reduce costs.
Adopt digital vendor solutions
Research from Float shows nearly half of SMBs lack financial visibility. Partnering with vendors that provide digital tools, automated billing, or real-time reporting creates better insight into cash flow.
Form strategic alliances
Shared marketing efforts, co-developed services, and cross-industry partnerships can open new revenue streams while spreading costs. IDC research highlights the importance of these alliances as a growth driver.
Why Vendor Partnership Strategy Matters
- Flexible vendor terms support liquidity.
- Canadian suppliers improve resilience against trade shocks.
- Digital tools streamline financial and operational visibility.
- Strategic alliances expand revenue opportunities.
Wrap-Up
KPMG research shows that more than 90 percent of Canadian SMB leaders remain optimistic about growth over the next few years. That optimism requires action. Rising interest rates and global trade shifts demand deliberate strategies and strong partnerships.
CanDo Business provides the platform to make those connections. Post an RFQ, meet Canadian vendors who align with your goals, and secure the partnerships that keep your business moving forward.