Consider This from NPR - The unexpected cost of tariffs for some small business owners

Episode Date: July 25, 2026

When President Trump invokes tariffs - he promises they’ll benefit Americans. But the experience of some small business owners tells a different story. For this week's Reporter's Notebook, Host Debbie Elliott speaks with NPR Business Correspondent Alina Selyukh about what she learned about the unexpected costs small businesses are shouldering.For sponsor-free episodes of Consider This, sign up for Consider This+ via Apple Podcasts or at plus.npr.org. Email us at [e-mail] episode was produced by Gabriel Sanchez. Our director is Erika Ryan.It was edited by Emily Kopp and Adam Raney.Our interim executive producer is Courtney Dorning.See pcm.adswizz.com for information about our collection and use of personal data for sponsorship and to manage your podcast sponsorship preferences.NPR Privacy Policy

It's consider this, where every day we go deep on one big news story. For years, NPR business correspondent Alina Selyuk has reported on the world of retail, shoppers and sellers from Walmart to the neighborhood cafe. Amazon has agreed to pay $1 billion in civil penalties. What I heard from Costco and Walmart, they both said their lower gas prices have people lining up actually. But last year, her reporting took a turn. She was starting to hear that small businesses, businesses were being hit hard by the Trump administration tariffs, especially before the Supreme

Court struck many of those tariffs down. When American small business owners scrambled to pay unexpected tariffs to the U.S. government, their goods landed at ports from around the world, as usual, but claiming them suddenly cost tens of thousands of unbudgeted dollars. Many couldn't cover the costs and face the prospect of not being able to get their products out of customs. Some had to tap into a murky world of financing to stay afloat. Here's what one small business owner, Joshua Esnard, told her. They can offer you as much money as you'll take, but they will charge you whatever they want. Asnard ended up accruing hundreds of thousands of dollars in lending costs and fees to cover those tariff payments. Consider this. When President Trump invokes tariffs,

he promises they'll benefit Americans. But the experience of Some small business owners tells a different story. From NPR, I'm Debbie Elliott. With President Trump announcing new tariffs, we wanted to speak to Alina about what she's learned covering the unexpected costs small businesses are shouldering. For this week's Reporter's Notebook, I began by asking her how she started covering the story.

For me personally, actually, the day that, President Trump announced his big tariffs, which was called the Liberation Day, I was physically at a fly-in of small business owners, organized by the National Retail Federation. So it's... Serendipitous. It was quite serendipitous. And, of course, tariffs became the conversation of the afternoon. And I met a large group of retailers at that event who immediately were able to, like, give very specific examples of how tariffs will affect their specific businesses. And I stayed in touch with those folks and then they put me in touch with other folks,

the small business community, especially people who are kind of out there talking about their business quite openly. It's a pretty interconnected group. I kind of grew a long list of business owners who I text with on the regular just to check in. And that is kind of how I stayed on top of how tariffs were playing out for real humans running businesses in the U.S. So one of the people that that you met during this, is this colorful entrepreneur who made millions selling haircut kits, of all things. Tell us about him and where his story took you. Yeah, you're talking about Joshua Esnard. Actually, a bit of an interesting backstory of how this happened. As I mentioned, I was in touch with a large group of retailers, small business owners. And at yet another fly-in, we at NPR invited a whole bunch of them to come to the office. for a roundtable, which was one of the most illuminating experiences of terrorists.

So we had, I don't know, like a dozen small business owners around the table just talking about what tariffs have been like. And Joshua Esnart was one of those people. And at some point, he brought up this fact that since tariffs have started costing small business owners a ton of money, they've been barraged by these never-ending text messages and voicemails of people offering them. cash fast. It's like, hey, you're probably struggling to pay your tariff. How about $100,000 tomorrow? And as soon as he brought up these pitches, the room just kind of erupted. All these small

business owners were like, oh, my gosh, no one talks about this. This is like insane. Every day we're getting these pitches day, hour after hour, multiple times a day. So who are the pitches coming from? Many of them come from this industry called merchant cash advances. Merchant cash advances are not loans. They're kind of their own thing. But some experts compare them to like payday loans, except for businesses. They offer extreme amounts of money, hundreds of thousands of dollars, tens of thousands of dollars, very fast in exchange for a cut of sales. It's an unregulated, very shadowy world of financiers.

And you could get a merchant cash advance from Amazon affiliation. or Amazon-backed provider, or it could be like a Wall Street firm. It's a really chaotic, really large industry. So here's my question. So why would they need to go to these like payday loan kind of operation or this quick cash operation versus just like their line of credit from a regular bank or whatever? Typically the main thing is that it's really fast. A traditional loan can take weeks, months, and if you need money,

now a merchant cash advance can deliver that. Many small businesses do have a line of credit with a bank. Many really small businesses run out of personal credit cards. Like it's just me and my credit card buying my supplies and selling stuff on Etsy or whatever. But for a lot of people, traditional banks and traditional lenders are simply not an option. I've talked to at this point, close to a dozen people who ended up taking merchant cash advances, who did try to get a loan from a bank and got turned down. They went to a credit union got turned down. A lot of it is first-time business owners, really young businesses that just don't have kind of a history, and a lot of immigrants started businesses, end up in marching cash advances. And the wild thing

about this is because merchant cash advances are not loans, lending laws mostly don't apply to them. So they don't have to be licensed lenders. The money that they give you comes really fast, but they take payments daily or weekly straight from your bank account. And the fees they can charge legally don't have a cap. And so to go back to Joshua, his business is selling hair care accessories. His kind of claim to fame actually is the cut buddy, which is this kind of template that you can hold against your head and give yourself really sharp edges as you're cutting your hair. He ended up taking, I actually have the numbers here. It was really why. He took and did up three cash advances for a total of $950,000 because he needed that money to pay tariffs.

He just didn't have cash sitting around for that. So $950,000 is what he borrowed. With the fees, his actual debt was $1.2 million. So several hundred thousand dollars were the fees that merchant cash advances take. So when you're desperate and customs has your product at the dock and you got to deliver to Walmart Target or whatever, and you have to clear that out. And then you're screwed because if you don't deliver to these retailers, they drop your product. So you got to pay it.

So where do you get the money from? You get it from the mob. And that's the MCA. And like I said, I've talked to at this point close to a dozen businesses who ended up in a similar boat. One woman I talked to took out $47,000. Her actual sum that was due back was $72,500. So $47 versus almost $73. And this kind of lending is exploding.

It is by far the fastest growing way that small business owners are getting money. Is there anything that surprised you as you went deeper into the reporting on these lenders and small businesses? I think the thing that surprised me the most is just how common this experience is and how little people talk about it. You bring it up in a group of small business owners and everyone gets really riled up. or everybody, somebody knows somebody who had struggled to pay merchant cash advance. But when you start talking to small business owners for whom merchant cash advances have snowballed, often they don't want to use their names. They don't want to talk publicly about their business.

They feel like it reflects poorly on them as business owners. They feel ashamed of the choices. And that level of conversation was quite different from, you know, covering tariffs, where most small business owners would quite eager. share their experience with paying tariffs. So those two kind of in parallel were very different things to report on in the past year. Well, thanks so much. NPR's business correspondent, Alina Sell-U. Thanks. Thank you. This episode was produced by Gabriel Sanchez. It was edited by Adam Rainey and Emily Kopp. Our director is Erica Ryan, and our interim executive producer is Courtney Dorney.

It's Consider This from NPR. I'm Debbie Elliott.