We’re a quarter of the way through 2026, and if your business has felt like it’s been navigating without a reliable map, you’re not alone.
Over the past three months, our team has had hundreds of conversations with Canadian business owners—in manufacturing, distribution, staffing, oilfield services, and beyond. What we’re hearing is consistent: this is an unusually uncertain operating environment, and the uncertainty itself is creating cash flow pressure even for businesses that are otherwise performing well.
What’s Driving the Uncertainty
The most common themes we’re hearing from business owners right now:
Trade policy and cross-border risk. USMCA renegotiation discussions, tariff threats, and broader geopolitical shifts are forcing businesses—particularly manufacturers and distributors with U.S. customers or suppliers—to reconsider how they plan and price. The recent U.S. military strikes on Iran have added a new layer of instability to an already unpredictable environment, with rising fuel prices flowing through to freight costs and input costs across virtually every sector. Some industries are seeing reduced cross-border activity while others, like Canadian energy, are seeing increased demand. The challenge is that the rules keep changing, which makes planning difficult.
Rising costs with no clear ceiling. Virtually every business owner we talk to is navigating higher costs—inputs, freight, labour, overhead. Margins are tighter, and the compounding effect of sustained inflation is showing up in cash flow gaps that didn’t exist two years ago.
Longer payment terms meeting the same fixed obligations. Customers are stretching payment terms to 60–90 days, while payroll runs every two weeks and supplier invoices don’t wait. That timing mismatch is one of the most common pressure points we’re seeing, regardless of industry.
Tightening credit conditions. Some businesses that previously had straightforward access to bank financing are finding the conversation more difficult. Credit conditions have tightened, and some lenders are being more selective.
What We’re Also Seeing: Businesses That Are Moving Forward
Here’s what’s interesting: not every business is in a holding pattern. We’ve seen a meaningful uptick in new clients and signed term sheets in Q1. Some business owners are using this period of uncertainty as a reason to build financial flexibility—before they need it—rather than waiting.
We’ve also seen a significant increase in interest around purchase order financing and supply chain finance, including a multi-million dollar supply chain financing opportunity in the oil fuel services sector. These are businesses that aren’t slowing down—they’re making sure they have the capacity to say yes when the right opportunity arrives.
One deal worth sharing: a boat distributor recently came to us looking for a solution after finding traditional floorplan financing wasn’t the right fit for their situation. Through purchase order financing, we were able to structure an alternative that gave them the working capital they needed. It’s a good reminder that Capitally’s solutions sometimes show up in unexpected places—not just the obvious ones.
A Note on Purchase Order Financing
Since PO financing has been coming up more frequently, it’s worth a quick clarification, because it’s one of the most commonly misunderstood products we offer.
Purchase order financing is not financing against a customer’s order to you—it’s financing for your order to a supplier. If you’ve received a purchase order from a customer but don’t have the capital to pay your supplier to fulfil it, PO financing bridges that gap. We pay your supplier directly, you fulfil the order, and repayment comes from the proceeds when your customer pays. It’s designed for companies whose growth is outpacing their available working capital—which, in this environment, describes a lot of businesses.
Looking Ahead to Q2
If Q1 was defined by uncertainty, Q2 is shaping up to be about decisions. The businesses we’re watching—and working with—are the ones choosing to act now rather than wait for perfect conditions.
A few things worth thinking about as you head into the next quarter:
If you’ve been turning down contracts or opportunities because you weren’t sure you could fund them, PO financing or supply chain finance may be worth a conversation.
If payment terms are stretching and your cash flow is feeling the pressure, invoice factoring can transform those receivables into working capital in as little as 24–48 hours.
If you’ve been hearing “no” or “not right now” from your bank, we’re often able to work alongside your existing banking relationship—or in the absence of one—without requiring the traditional collateral or financial history banks look for.
We’re Here When You’re Ready
We don’t think every business needs Capitally right now. But if any of this is resonating—if you’re feeling the pressure, turning down opportunities, or simply want to understand your options before you need them—we’d be glad to have a conversation.
