A Business Insider report has found 37% of SMEs with an overseas element to their business believe “Brexit will be bad for their business” and just 11% are feeling positive that Brexit will be good for their business over the next 3 years.
500 SMEs were asked what they thought Brexit’s impact had been so far, and what it might look like in the future. 53% feel nothing has affected them so far and 36% are already experiencing some damage.
Importing and Exporting – Who Wins?
Small businesses and SMEs often feel the brunt of economic uncertainty because they have fewer protections and less valuable assets than large corporations.
It’s not all bad though, particularly for British businesses that export. When the value of the pound fell to its lowest in 30 years after the UK voted to leave the EU, “British-made goods (became) more competitive abroad” but imports were more expensive.
Some businesses didn’t predict the boost to export profits would last, however, and they were right. Sterling has recovered and is now the “best performing G10 currency over the past 6 months”. The Department for International Trade recently launched the Exporting is Great campaign to encourage small businesses to start selling overseas.
Uncertainty Makes Businesses Cautious
Small business owners feeling concerned about Brexit, and aren’t sure what to predict, will be extra careful over the next couple of years. Many will reduce their costs and some will put expansion on hold.
There are lost of stats pointing to different results. When the Federation of Small Businesses (FSB) surveyed members in the month after Brexit, they saw “the second-largest fall in confidence” in their history. However, a November 2017 Telegraph article also found “profits and exports are both growing at the fastest pace since 2015”.
Regardless of the stats, many business owners do nothing or tighten their belt when they’re facing uncertainty. This could mean they’re resisting making important upgrades and developments.
Access to Traditional Finance Could be Even More Difficult
A report commissioned by the Association for Financial Markets in Europe found that SMEs will find it much harder to “navigate the wholesale banking impacts of a hard Brexit” than large corporations.
Small businesses are more likely to stay loyal to the bank they already use, but this might not be a smart option after Brexit, when “banks (may) change their services for existing customers”. Thankfully, alternative finance options are growing in popularity and lending more and more every year.
Capify provide flexible alternative finance solutions for small businesses. The online application is simple and you’ll receive a decision in 24 hours. See how much your business can raise today.
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