Credit, Collections & Insolvency News
Extreme currency fluctuations have caused SMEs to face substantial losses and are compelling businesses to change their FX strategy, according to data from independent SME funder, Bibby Financial Services (BFS).
54 per cent of SMEs surveyed say they’ve been stung by volatile exchange rates in the past year, losing over £53,000 on average as a result. Over half (53%) reported that their business had lost up to £ 20,000 due to FX volatility in 2025, rising to 72 per cent among the smallest businesses with 1-9 employees.
Businesses in the services sector have been hardest hit: nearly two-thirds (65%) of those businesses report being negatively impacted by currency fluctuations, 11 percentage points higher than SMEs on average.
This volatility is forcing SMEs to take a different approach to trading overseas. Nearly six in ten (58%) have adjusted their FX strategy to mitigate the risks of currency fluctuations, and 59 per cent of SMEs trading internationally are starting to make FX transactions in euros or sterling to mitigate US dollar volatility.
In part, this shift is being led by a change in trading partners; 60 per cent of SMEs surveyed say their businesses are now pivoting more towards European trade in response to the unpredictable trading environment.
Michael McGowan, Managing Director of Bibby Foreign Exchange, said“Businesses are navigating a period of sustained currency volatility not seen since the Great Depression. For SMEs trading internationally, a poorly timed transaction can significantly erode margins, leaving smaller firms particularly exposed. SMEs need to take practical steps to mitigate uncertainty and reduce the risks associated with currency fluctuation, such as diversifying trading partners or adjusting their foreign exchange strategies – or both.”
