Trade finance in times of crisis: Why SMEs need to secure working capital anew

Insights Articles | 19 May 2026

The F.A.Z. article “War with Iran threatens trade financing” describes how geopolitical shocks and rising uncertainty are weighing on trade finance: banks are reassessing probabilities of default, placing greater weight on counterparty bank risks and, in an environment of potentially higher inflation and more restrictive monetary policy, must manage capital and collateral more strictly. Experience shows that the result is more selective, more expensive and, in some cases, denied trade finance – despite the continued existence of real trade flows.

What this means for businesses

In times of stress, competitiveness is determined not only by orders but also by liquidity and predictability. Companies with long payment terms, thin margins and high dependence on supply chains are particularly affected – typically in standardised intermediate goods and price-driven segments (textiles are also cited as an example in the article).

When banks reduce credit limits or extend processes during such periods, three risks arise in practice:

  • Operational risk: Delivery capacity suffers if advance payment requirements increase or purchases cannot be properly pre-financed.
  • Revenue risk: Companies become more easily replaceable in the supply chain if they cannot secure financing.
  • Margin risk: Financing costs rise faster than selling prices can be adjusted.

Our view (Artis Trade Invest): Structure trumps volume

In our view, the answer is not ‘more credit’, but better structuring aligned with actual cash conversion events. That is why we adopt a ‘factoring-first’ approach:

  1. Factoring for cash flow stabilisation
    Factoring can monetise receivables from services actually rendered in a timely manner. A sound risk architecture is crucial here: debtor quality, dispute and dilution ratios, concentration limits, assignability, and robust proof of delivery/performance.
  2. Selective trade finance where control is in place
    As the market shifts towards prepayment or shorter tenors, the need for structured solutions increases. At the same time, performance, documentation and fraud risks rise. We therefore finance trade finance set-ups selectively and only where the flow of goods, documents, counterparties, and KYC/AML and sanctions processes can be properly managed.

What matters in the current situation

The article makes it clear that trade finance quickly becomes a scarce resource in times of crisis. SMEs would be well advised to diversify their financing base and secure working capital through transaction-based, short-term and self-liquidating structures.

Artis Trade Invest supports companies with import and supply relationships to Europe/the UK, the EU and the US – with a ‘factoring-first’ approach and complementary trade finance structures where risk is measurable and controllable.

Contact and further information: www.artistradeinvest.com

Note: This text is an independent summary and not a quotation from the original article: https://www.faz.net/premium/weltwirtschaft/finanzwelt/irankrieg-bedroht-handelsfinanzierung-accg-200799557.html