FOR IMMEDIATE RELEASE
Alex Littner, Managing Director of Boost Capital, said: “In the lead-up to the referendum, Boost Capital saw a rush of SMEs applying for bridging finance, anxious about what the vote might mean for their businesses in the short-term, and, vitally, their cashflow. Unfortunately, that uncertainty looks set to continue, as we wait for markets to react to the Brexit news, and the economy experiences the after-shocks of this dramatic change of course.
“What can businesses do in the meantime? British firms trading overseas that are currently owed money - if the outstanding sum is in a foreign currency - could defer debtors’ payments until the pound’s position recovers. Even if this tactic means borrowing money in the UK in the short-term to keep cashflow healthy, it could be a prudent move.
“Should the pound fall by as much as a fifth in value, as predicted by many, those buying goods overseas will suffer, so importers will expect to see their overheads increase. For them, the best option is gauging if sterling will fall further, then securing forward contracts to fix the costs of international money transfers - if this hasn’t already been done. Again, short-term borrowing to cover these inflated costs may also be necessary. On the flipside, there could be benefits for exporters in a weakened pound. Today, Britain’s products look better value than a week ago, so canny exporters will take advantage of this by being quick to market themselves aggressively to foreign customers.
“Regular business owners should scrutinise company costs to determine if any cost savings are possible – on energy bills, business insurance, or even by changing suppliers. Ensure payment processes operate efficiently, with invoices issued promptly to keep company finances healthy. Communicate with suppliers and customers to agree a course of action while circumstances remain volatile. Employing best business practice has never been so important.
“The Lisbon treaty says it will take two years to unpick a member country from the EU, but, in truth, no one knows how long this unprecedented process will take. There is also the fact that the referendum is merely advisory, and it will take an Act of Parliament to force a Brexit, which may not happen. It is impossible to predict what the coming months and years will involve for Britain, both in terms of day-to-day business if we do extricate ourselves from the EU, or what the UK economy will look like once the dust has settled. However, I sincerely hope George Osborne doesn’t deliver on his threat to implement a punishing austerity Budget that would likely pitch Britain into another recession.
“Regardless of all of these disruptive factors, we will continue to work with our small business customers to keep their everyday operations running, and to implement their growth plans. But Boost Capital, our clients, and the British economy desperately needs stability as quickly as possible if we are to withstand the current upheaval, and to flourish in the future.”
Tel: 01245 240 881
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Willem van Lynden
Sales and Marketing Director
Tel: 01245 240 885
As a specialist small business lender, we're champions of the SME sector. We are here to help UK SMEs achieve their full potential by providing fast, flexible, and hassle-free small business loans.
We have over 14 years' experience helping SMEs with their plans to grow. We've helped more than 14,000 businesses across 400+ industries, and have funded more than £750m.
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