Brexit - for better or for worse


Toni Dare - Pulse Cashflow Finance

Brexit - for better or for worse

So the Brexit vote is over but the Brexit debate rages on. In the aftermath, of the decision to leave the European Union, confusion reigns over what the impact of the decision will be on the UK economy and the future trading conditions for UK businesses. The press is peppered with viewpoints and commentary from so called experts whose views differ and range from overly optimistic to depressingly pessimistic which is only serving to pour fuel on the level of uncertainty and confusion that pervades. The Pulse team have joined in the debate and would like to share our view on the future and our challenge to both the Government and UK SME’s.

Regardless of your view on Brexit, we must come to terms with the UK exiting the European Union and what that may mean for business. The Government is quite clear that “Brexit means Brexit” but are failing to provide clarity to the 5 million plus SME’s on the single most important question on the table: how will the UK retain access to the single market whilst regaining control of people movement? This is a huge challenge for the Government and Theresa May has made it clear that she will not be rushed into communicating anything until she can reveal all. In our view, to avoid unhelpful speculation, she needs to outline her vision for the future whilst being realistic and presenting what she feels the challenges will be in finding a solution that will work for all.

We already know that the pound has weakened and the economy is forecast to slow down but the uncertainty as to what the future will look like has the greatest potential to damage UK business. With the threat from some international firms that there is a real possibility of them moving operations to mainland Europe it poses a risk to UK businesses already supplying goods and services to them. Added to this the ongoing skills shortage in the UK, there is much concern over what Brexit will mean to those businesses employing non UK nationals to solve this issue. Our challenge to the government is to outline our ‘exit’ and ensure we strike the best possible trade deals for the UK and its SME’s and table a workable solution to the movement of people and much needed skills as quickly as possible.

Despite all of this, as a funder working with a diverse set of UK SME’s, our view is that our clients have not felt any real tangible effect as they continue to trade as normal with some leveraging the opportunities that a weaker pound brings. If the variety of surveys being published around this topic are correct they reveal, there is an equal split between those firms reporting business levels remaining the same or improving and those who report a reduction. In our view this decrease could be attributed to a reduction in business confidence which dropped by 30 points in the second quarter of 2016. We all understand how critical business confidence is to the economy which is why we believe it is essential that UK SME’s keep on the front foot and adopt a business as usual attitude.

To ensure this happens, it is vital that UK SME’s have access to sufficient funding over the coming months and years. We are all very much aware that SME’s remain the most vulnerable in the light of any tightening in lending or economic downturn. It is therefore a relief that the Governor of the Bank of England continues to reassure us that the UK’s shored up financial system “will dampen the aftershocks from recent events rather than amplify them”. The UK needs this to be true to ensure that SME’s don’t suffer as they did during the last credit crisis as banks withdrew lending to the sector and the inevitable recession that followed. However, with the UK losing its AAA rating, along with volatile markets, there remains a possibility that a tightening in restrictions on lending, especially from the major high street banks could reappear.

Pulse Cashflows challenge to UK business is to ignore the speculation and focus on running their businesses as usual, seeking out growth opportunities as the UK economy needs SME’s to continue growing and creating jobs and ultimately wealth. With the right guidance and access to flexible finance, SME’s can continue to plan for and invest in growth initiatives and remain as the backbone of our economy. Our challenge is for SME’s and their advisors to broaden their view from traditional high street banks to alternative finance specialists who understand their cash flow challenges and can provide flexible funding solutions that better suit their needs.

Pulse continues to believe in UK businesses and are stepping up our efforts to ensure that we provide access to funding to as many SME’s as we can. Our experience means that we understand their challenges and can customize a solution that best fits their requirements. As funders, with our clients and their advisors we all have an important role to play to work together to continually drive business on in the UK. If we are to ensure the ongoing success of the British economy, we need to seek out the opportunities that this brave new world will undoubtedly have.

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About Us

Pulse Cashflow are a leading independent funder specialising in invoice finance who work with businesses experiencing a range of cashflow challenges.