With Boris Johnson in the hotseat and a 31 October date set for a European Union (EU) exit, it is looking increasingly likely that Britain will leave the EU without a deal.
The UK media has covered endless scenarios as to how this may impact businesses and people, who try to continue their everyday lives, while the economy tries to adjust to independent life, but we wanted to take a look at what it could mean for small business owners, and how they can create a contingency plan.
The Bank of England believes that UK banks are strong enough to survive a disorderly Brexit; however, a period of market turmoil is likely to result in restricted lending to small businesses and stricter lending criteria. This could result in short-term cashflow problems and a lack of liquidity – small businesses should therefore ensure they have access to a line of credit.
The UK Adviser can help small business owners access funds from their personal finances, in the form of equity release or a remortgage, and offer advice on commercial and business finances, whether it’s a limited company or sole trader set up.
The uncertainty of the situation and what happens after October also means that consumers are curbing spending and putting big purchases on pause, so businesses will have to prepare for a potential drop in demand.
For businesses that trade with other countries, a no-deal Brexit could also result in EU tariffs being added to UK exports from 31 October, causing financial problems to businesses that trade internationally. It may also mean additional completion of documentation and paperwork, adding administration time to certain tasks, or losing business entirely to local EU-based suppliers.
Despite the short-term affect that Brexit will have, RBS chief Ross McEwan acknowledged that the UK economy will always bounce back and businesses should not give up hope. Prior to the referendum the UK economy experienced fast growth and high business investment, giving us an optimistic outlook on the economy once Brexit tensions begin to calm down. This means that the economy will continue to grow in the long term.
With help from experienced financial professionals at the UK Adviser, small businesses can ensure they have adequate funding and assure a prosperous future. Our friendly and approachable advisers will be able to examine your business and the unique pressures it faces, to provide a financing solution suited to you.
With help at every stage of your financial journey, UK Adviser can help you navigate the often-confusing world of commercial and business finance. Whether it’s releasing equity in your home, refinancing your existing portfolio, or getting the best deals in a no-deal scenario, call or email us today to start your journey.