Guide

Managing currency risk as a small business a practical guide.

Buying or selling in US dollars exposes a Canadian business to exchange-rate swings. Simple steps reduce the risk without complex hedging.

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How can a small Canadian business manage currency risk?

Short answer: List your foreign-currency costs and revenue by month to find net exposure, hold a US-dollar account to match US revenue with US costs, build an exchange margin into quotes and review prices when rates move. For larger, predictable amounts, ask your bank about forward contracts that fix a rate.

Key facts

Net exposure = foreign revenue − foreign costs
A US-dollar account avoids repeated conversions
Build exchange margins into quotes
Forward contracts can fix a future rate

Overview

Buying or selling in US dollars exposes a Canadian business to exchange-rate swings. Simple steps reduce the risk without complex hedging.

Know your exposure

List all costs and revenue in foreign currencies with monthly amounts. Net exposure is the difference: if you earn and spend similar amounts in US dollars, your risk is lower.

Note timing: a purchase order priced today and paid in sixty days carries exchange risk for sixty days.

Match currencies where possible

Hold a US-dollar account to receive US revenue and pay US costs without converting each time.

Price US sales in Canadian dollars where customers accept it.

Build currency into pricing

Include a margin for exchange movements in quotes for imported goods. Review prices when the exchange rate moves significantly.

Add exchange-rate clauses to long contracts.

Consider simple hedges

Banks offer forward contracts that fix an exchange rate for a future date. For predictable, larger payments they can remove uncertainty.

Hedging has costs and requirements; ask your bank.

Plan cash with a cushion

Forecast using a conservative exchange rate. If the rate moves in your favour, the difference becomes a cushion rather than a shortfall.

Typical starting points

Monthly revenueTypically from around $20,000 a month in deposits for Canadian files. The exact line varies by funder and by file.

Time in businessTypically about 12 months. Newer businesses can be reviewed, but the options narrow.

Account healthLimited low-balance or negative days. Funders read the last few months of bank statements for this.

CreditScores from 500 are considered. A score of 600 or higher opens more options and better offers.

DocumentsA signed application and recent business bank statements, typically the last four months.

Existing advancesFiles with an existing advance can be reviewed, including second position.

Your checklist

List foreign-currency revenue and costs.
Calculate net exposure.
Open a US-dollar account if useful.
Add currency margin to quotes.
Ask your bank about forward contracts.

Guides like this one are general education written for Canadian owners. They are most useful when you turn them into a few concrete actions with dates, and revisit them when your numbers change. If funding is part of your plan, the same preparation that makes the plan work, clear numbers and a specific purpose, also makes an application faster and stronger.

Talk it through

Merchant Fund Express reviews Canadian businesses in every province and territory. If you would like a specific answer for your business rather than general guidance, send a signed application and your last four months of business bank statements, or call (305) 384-8391 first to ask a question.

Sources and review

Export Development Canada

Reviewed by the Merchant Fund Express team on October 12, 2026. Official pages checked as of that date.

Common questions

Is this advice for my situation?

It is general education. Your file and agreements are specific, so read them and ask questions.

What should I do next?

Gather four months of statements and write what the money is for in one sentence.

Can you help me apply?

Yes. Apply once and the file is matched to the structure that fits.