Flexible finance solutions to counter Brexit uncertainty
Chris Meldrum, national business development director at Aldermore | 08:59 Wednesday 25th September 2019 | 2
Since the EU referendum in June 2016, businesses have been looking for clarity over what the future will mean for operations such as pricing, availability of goods and exchange rates.
Many SMEs hoped that a deal would be reached with the EU, helping to ensure a stable and smooth transition. However, if we leave without a deal, this could create significant issues for many businesses and lead to a rise in demand for finance products.
Finance providers, brokers and advisers all have a role to play in assisting businesses, helping them to find effective and practical solutions to some of the issues Brexit could bring.
One particular phenomenon is stockpiling. Businesses are understandably concerned about the cost and availability of raw materials from the EU in a no-deal situation, with many consequently buying up stock in advance.
Stockpiling has been most evident in the food and manufacturing sectors. Ultimately, any sector that relies on importing from the EU could be affected.
The issue that stockpiling creates is a simple one of cash flow. Businesses face the need to spend large amounts of cash in advance to buy goods and materials that won’t generate revenue for potentially months. Dormant goods in a warehouse are not only expensive to store and insure, but also tie up working capital.
Invoice finance remains an effective solution to the problems that stockpiling creates because it quickly releases cash into the business and enables clients to access up to 90% of their outstanding invoices, often within 24 hours.
At Aldermore, our clients run it, we help keep it running and we are seeing a trend whereby clients have moved from asking us what facilities would theoretically be available, to now asking if these facilities can be implemented. By painting a picture of a business’s balance sheet and its assets, we work to create a bespoke working capital facility that they can drawdown on and control in the way that best suits them.
As a result of the uncertainty surrounding Brexit, and the possibility of a no-deal outcome, stockpiling is an issue which has impacted businesses across the spectrum, regardless of sector. Due to our in-depth understanding of businesses flexible financial needs, we are able to support SMEs through this uncertain Brexit period, consequently helping businesses achieve their needs and objectives.
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Hodge joins Advise Wise Mortgage Club lender panel
Hodge has announced that it has been added to Advise Wise Mortgage Club’s lender panel...
Shawbrook provides £500,000 second charge loan to protect property’s value
Shawbrook Bank has provided a £500,000 second charge loan to save a client’s property value...
Redwood Bank launches new business savings bond
Redwood Bank has launched a new one year business savings bond with a rate of 1.62%...
OakNorth Bank completes seven-figure debt finance deal
OakNorth Bank has provided independent advisory firm Dow Schofield Watts with a seven-figure debt finance facility to make a strategic investment in Camlee Group...
Starling Bank raises £60m and gives shares to employees
Starling Bank has revealed that it has raised £60m from its existing investors Merian Global Investors and JTC...
Cash costs time for SMEs — how can banks help?
Cash is still king for businesses up and down the country; businesses that must essentially be flexible to consumer preferences...
SB to host filmed roundtable on how specialist banks aim to utilise technology in 2020 and beyond
Next week, Specialist Banking will host its sixth filmed roundtable event in association with Watson Farley & Williams...
Aldermore names Tim Boag as group managing director
Aldermore has named Tim Boag (pictured above) as its new group managing director of business finance...
Aldermore’s outlook for SMEs in 2020
As we enter 2020, it’s worth reflecting on how the economic landscape in which UK small businesses currently operate in is changing...
Cynergy Bank opens first Scottish office
Cynergy Bank has opened its first Scottish office in Edinburgh...
Shawbrook Bank launches new business savings products
Shawbrook Bank has launched two new business savings products and enhanced a third to strengthen its portfolio...