Last week’s speech by Theresa May confirming the government’s intention to secure the greatest possible access to tariff-free trade with Europe, and also to maintain the UK’s status as a centre for international talent, will no doubt be welcomed by small businesses looking for clarity on the terms of the UK’s Brexit deal.
However, the Federation for Small Businesses, FSB, has warned that global trade will only flourish if the agreements “prevent additional barriers, such as cost and paperwork”.
The speech comes as research reveals that the single most important factor for SMEs in the Chancellor’s next Budget is clarity about Brexit negotiations, with a quarter of SMEs stating this as their top priority, above red tape, corporation tax and further investment for skills and training.
Research also reveals that the UK’s decision to leave the EU has resulted in over two in five larger SMEs changing their funding plans. This compares to just 15 per cent of micro SMEs stating that their funding plans have changed, demonstrating how the UK’s larger SMEs are more affected by the Brexit vote than their smaller peers.
One in five larger SMEs have said they will not borrow money until the final outcome of the referendum is clear and one in seven have stated that they will not be able to get finance from their preferred lender.
Meanwhile just 6 per cent of micro SMEs have decided not to borrow any money until the outcome is clear and only 4 per cent think that they will not be able to get finance from their preferred lender. Also, as a direct result of the EU referendum, one in ten larger SMEs were looking at alternative finance, compared to just one in twenty micro SMEs.
Greater uncertainty and ambiguity since the Brexit vote mean that SMEs of all sizes are now seeking increased levels of advice to try and navigate the waters of post-referendum Britain.
Over two in five financial decision makers in SMEs have sought advice about their business’ finances since the referendum, with the main source of advice being banks. Six in ten large SMEs have sought advice compared to just a quarter of micro SMEs.
Adrian Sainsbury, Managing Director of Close Brothers Banking Division, comments: “The ongoing negotiations over the terms under which the UK leaves the EU have had a perceptible impact on SMEs’ business and funding plans. I am hopeful that the Prime Minister’s speech will go some way to providing clarity around the exit that SME’s are looking for.
“Despite the uncertainty, it is encouraging to see that these larger SMEs have not stood still but that they have sought financial advice. But it is essential that the advice they receive is tailored to their specific needs takes each SME’s growth stage and industry into consideration. This will help SMEs to prepare for the potential outcomes of the Brexit negotiations and allow them to plan and invest in order to unlock their potential.”
Source: Business Matters