The Supreme Court told the U.S. government to return $166 billion in tariff payments. The money won’t arrive for months. Possibly years. So some importers aren’t waiting. Instead, they’re pledging their government refund claims as collateral and borrowing against them right now, in a form of emergency financing with no real precedent in modern U.S. trade history.
The $166 Billion Waiting Game
On Feb. 20, 2026, the Supreme Court ruled 6-3 that tariffs imposed under the International Emergency Economic Powers Act were unlawfully applied. Every dollar collected from U.S. importers between Feb. 4, 2025 and Feb. 24, 2026, totaling roughly $166 billion across 53 million entries, is now eligible for a refund, plus IRS-rate interest.
The practical problem is the machinery for repayment doesn’t exist yet. CBP’s new CAPE portal (Consolidation Administration and Processing of Entries) launches April 20 and operates in phases. Phase 1 covers entries that are either unliquidated or liquidated within the last 80 days: an estimated 63% of eligible entries. Remaining entries get addressed in a later phase, with no timeline given. Once a claim is accepted, CBP’s stated target is 45 days for processing. But that’s the agency’s target, not a guarantee.
Trade analysts are more skeptical. TD Securities estimates 12–18 months for most refunds. The Trump administration has shown no enthusiasm for expediting payments, and legal challenges, eligibility reviews, and administrative appeals could stretch timelines further, to 2 years or more in contested cases. Of the 330,000+ importers eligible for refunds, only 26,664 have enrolled in the automatic refund system as of the latest CBP filing, representing $120 billion of the total $166 billion pool. That enrollment number is 8% of all eligible importers, which tells you most businesses haven’t fully engaged with the process yet.
For product-based businesses, e-commerce operators, and physical goods importers who spent the last 14 months absorbing tariff costs: cutting margins, freezing hiring, drawing down credit lines. Waiting another year-plus for reimbursement isn’t viable. That’s the gap the new financing instrument is moving into.
What Does It Mean to Borrow Against a Tariff Refund Claim?
At a practical level, an importer with a valid IEEPA refund claim takes that claim to a commercial bank, hedge fund, or private credit fund and borrows against its expected value. The standard loan-to-value ratio sits around 50%, meaning a $20 million refund claim supports a $10 million loan. Interest is structured as payment-in-kind (PIK) interest, meaning it accrues rather than being paid monthly, and the full amount (principal plus interest) gets repaid once the government issues the refund.
Minimum loan sizes currently sit at $10 million, requiring an underlying claim of at least $20 million to qualify. That threshold effectively locks out most small importers. According to trade consultancy Ryan, the businesses most active in pursuing these loans are large retailers and manufacturers with substantial tariff exposure. The founder running a $3 million direct-to-consumer import operation does not qualify.
For those who can’t meet the loan threshold, there’s a secondary market forming. Firms like Outpost Capital Partners are buying claims outright, paying 55–75 cents on the dollar. Raniero D’Aversa at Orrick law firm framed it as a tradeoff for borrowers: “You’re paying interest, but you’re not giving away 50% of your claim.” Neil Seiden of Asset Enhancement Solutions has been advising importers on whether borrowing at 15% interest makes more financial sense than selling at 80 cents; the break-even, he estimates, is roughly 2 years. If refunds arrive faster, borrowing wins. If they don’t, selling was the smarter move.
There’s also a litigation wrinkle for retailers. Any business that passed tariff costs to customers through price increases could face class-action exposure if it later collects a refund. Trade attorneys are advising some retailers to think carefully before filing claims that might attract plaintiff-side attention. That’s an added layer of complexity that doesn’t affect manufacturers and direct importers in the same way. It’s reshaping who’s moving fast versus who’s sitting back.
For context on how broader economic pressure is shaping founder decision-making right now, see consumer sentiment hitting a 75-year record low in April 2026 and the parallel Section 232 tariff overhaul hitting finished goods, both of which are squeezing the same product-based businesses now eyeing refund-backed financing.
What Should Founders Watch Before Making a Move?
The CAPE portal opens April 20. Whether that goes smoothly or breaks under the weight of 330,000 potential filers is the first thing to watch. A rocky launch extends the wait, which increases the value of bridge financing. A clean launch that produces refunds on the 45-day timeline removes most of the urgency to borrow at expensive terms.
The second signal is the administration’s posture toward expedited refunds. The CBP’s official IEEPA duty refund guidance outlines the process, but what happens after claims are filed depends on political will. Court oversight may force the government’s hand, but litigation timelines are themselves unpredictable.
For importers with refund claims under $20 million, the loan market isn’t accessible right now. The practical near-term options are: document tariff payments now (entry numbers, dates, ports, duty amounts), register ACH banking information in the ACE Portal before April 20, and consult a licensed customs broker on eligibility. KMCO’s preparation guide for the CAPE system is the most actionable public resource for small importers getting ready to file. Waiting to prepare until the portal goes live risks missing early processing windows and being pushed to Phase 2, with no deadline set.
