Explore more insights

The impact of Brexit on SMEs and 4 ways you can help

Brexit uncertainty has everyone questioning what the future holds for SMEs, but there are ways your firm can help.

Ollie Maitland Aug 28, 2019

The spectre of Brexit has been hanging over UK businesses for three years now, since the result of the 2016 referendum committed the country to leave the European Union (EU).

With the deadline for exiting the EU constantly changing, businesses are trading in challenging times with little economic certainty around planning new activity, informing operational budgets or guiding their longer-term business strategy.

So, as your client’s go-to accounting adviser, what can you do to help? And how can your firm work with clients to create a more positive outlook for their post-Brexit future?


The key Brexit threats for British business

With large-scale projects being delayed, and growth budgets severely reduced, UK businesses have entered into a period of semi-hibernation. But this approach of ‘putting business on hold’, is having a serious impact, creating an increasing list of threats that may impact on your SME clients’ futures. There is financial market uncertainty, funding providers are tightening their belts, organisations are downsizing, cutting jobs and looking overseas for their next growth move and overseas investors are avoiding the UK. 


The real-world cashflow effect for UK SMEs

No-deal Brexit could cause a £30bn economic hit, according to brand new research into borrowing by the Office for Budget Responsibility (OBR).

You may think that the economic shock of Brexit is most relevant to large corporate clients and the public sector. But it’s likely that the biggest losers in any ‘cashflow crisis’ will be the 5.6 million small and medium-sized enterprises (SMEs) that drive the UK economy.

Research by Premium Credit has shown that 45% of SMEs are ‘very concerned’ about managing cashflow next year, 34% are ‘fairly concerned’ and only 21% are not worried.

The UK’s SMEs deliver 52% of all private sector turnover and employ 60% of all private sector employment. So, if cashflow problems do begin to bite, we’re likely to see more job losses, more business failures, reduced investment and a knock-on effect on wider GDP.



Supporting your clients through uncertain times

As a modern accountant and adviser, there is the opportunity to support your business clients as they prepare for managing future threats and opportunities. As Capitalise accounting partner, Alex Falcon highlights:

“As accountants, we can help you with funding, we can help you with investments and grants, we can help you with opening up a bank account. There's so much that we can do for clients right now. It's not just about doing the accounts and payroll anymore.”

Risks or threats can often be turned around into an opportunity, with the right foresight and planning. For accountants, the risk of a no-deal Brexit is an opportunity to demonstrate how proactive support can help clients prepare for future shocks, rather than only highlighting a problem once it's too late to solve. 

Nothing strengthens a relationship more than supporting clients to navigate difficult and uncertain times, something that Capitalise accounting partner, Alan Woods, has already experienced during the 2008 economic crash:

“Our specialism in funding at Woods Squared came about, initially, through helping clients get through that challenging period of time during the recession. So, almost by default, we became experts in funding and knowing who the local brokers were and finding finance solutions. That lead onto helping clients with their business plans and looking at financial forecasts, and that’s evolved as a service, over time, certainly with the likes of Capitalise on board.”

Running forecasts and keeping on top of cashflow will be vital as we get closer to the October Brexit deadline. And helping clients stay in control of their numbers will be invaluable, as Alex Falcon demonstrates:

“It’s not about looking two years down the line, it’s more realistic to look at 30, 60 or even 90-day planning. If you know you've got a big fat bill coming out, plus your tax bill, that's when you, as the owner, can start planning and when we can start advising.”


Ways your firm can help SMEs prepare for Brexit

With Brexit such a key threat for your SME customers, if you haven’t already booked a meeting, here is a golden opportunity to talk to clients. Assess where they could be vulnerable during a post-Brexit downturn, and help them plan accordingly to mitigate that risk.

This isn’t an exhaustive list, but areas of advice to consider may include:


  1. Cashflow forecasting and management – helping your SME clients predict their future cashflow position, spot the cash gaps and avoid the potential threats. 
  2. Funding advice and access to finance – identifying when and where there’s a funding need and quickly running funding searches to locate the best possible funding.
  3. Scenario-planning and business strategy – running various scenarios and strategies so SME clients can formulate a ‘Brexit strategy Plan B’ to mitigate any negative impact.
  4. Instilling confidence in owners/management – emotional support is a vital part of the advisory mix, helping you give SMEs the confidence to overcome their challenges.


Assessing each SME client’s vulnerability to a no-deal Brexit and offering them the advice, support and insights will be invaluable. 

If you’d like to know more about how Capitalise can support your funding advice and advisory services, please do come and talk to us.

alternative finance
invoice finance
case study
trade finance
contract finance
working capital
startup loans
fashion finance
merchant cash advance
future accountant
product of the month
women in funding
partner of the month
business tips
live session
international women's day
covid19 coronavirus
corporate finance
accounting firm
asset finance
hire purchase
credit score
business funding
business credit score
south africa
small business
business loan
property finance
commercial mortgage
credit imporvement
spring budget 2023
small businesses
spring budget
commercial mortgages
trade debtors
cash flow
truck finance
late payments
lorry finance
building a financial safety net
trade debtor days
bridging loan
credit checks
interest rates
balance sheet
bad debt
company credit checks
debt collection
credit control
check company credit
business loans
instant offer
credit scores
credit review service
company credit check
commercial property
revolving credit facility
line of credit
recovery loan scheme
growth guarantee scheme
business finance
Follow Us
Sign Up to Receive Updates

Signup to our newsletter

Have insights about the accounting community sent straight to your inbox. Sign up to our newsletter.