SMEs avoiding further finance amid Brexit uncertainty

A FIFTH of small- and medium-sized enterprises (SMEs) have put plans to seek finance on hold due to Brexit uncertainty.

Research by alternative lender Nucleus Commercial Finance found concern over Brexit was the main reason for holding back, while one in seven were worried about company performance and 11 per cent cited a change in business strategy.

For those business owners who have put plans on hold, 88 per cent said they still plan to try again eventually but 23 per cent were unsure of when.

Read more: Three quarters of SMEs fear chasing late payments

“In a climate of political and economic uncertainty, UK SMEs are becoming increasingly reluctant to borrow,” Simon Willmett, finance director at Nucleus Commercial Finance, said.

“As a result, almost one million of them have held back from accessing capital, missing out on the opportunity to invest in future growth and maintain their competitive advantage.

Read more: SMEs finding it harder to access finance

“This hesitancy comes at a time when the UK needs a thriving SME sector to underpin the economy and we can’t ignore the long-term impact of under-investment on the future of the UK’s SMEs.

“We believe it is the government and finance industry’s responsibility to demonstrate the positive impact alternative finance can have for businesses.

“SMEs need to invest in the future to stay ahead of the curve and continue to play their pivotal role in our economy.”

Read more: Bank of England backs data platform to boost SME financing