SMEs struggle to find finance in the wake of the Brexit vote
ALMOST one third (30 per cent) of the UK’s small- and medium-sized businesses have been finding it harder to get financing since the Brexit vote in June.
According to a new report by Close Brothers Invoice Finance and Rentals, SMEs believe that funding is now harder to come by and they were encouraged to seek alternative options to avoid any cash-flow problems in the future.
“During periods of economic volatility, businesses need strong finance to ensure they can continue investing for the long-term while managing short-term cash flow issues,” said David Thomson, chief executive of Close Brothers. “It is important to consider a wide range of options now and to put funding plans in place ahead of any challenges emerging.”
The vast majority (73 per cent) of the businesses surveyed said that they have not seen impact on their business performance since the referendum. Furthermore, while 44 per cent of SMEs are worried about losing business in the future, 40 per cent believe that they will see an increase.
Thomson urged business owners to make contingency plans before Article 50 is triggered – which Prime Minister Theresa May said will happen by March – so that they are prepared for any economic volatility.
“It’s clear that despite the pre-referendum warnings, there has not been any calamitous impact on SMEs from the UK’s vote to leave,” he said. “However, SMEs are not complacent and are acutely conscious of the need to monitor both threats and opportunities that may yet come from Brexit.
“Some SMEs are having to rethink their plans in the wake of the referendum, as their customers rein back their spending and as finance and people become more difficult to find,” Thomson added.
“Over time, it may be that more SMEs are faced with such problems – it is therefore crucial that firms have contingency plans in place they can turn to if performance does begin to deteriorate.”