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Paul Surtees, MD and Co-founder of Capitalise.com
As Theresa May and her new cabinet settle in, one subject looms over the corridors of power:a strong Britain outside the EU is reliant on its small business economy.
Figures published by the FSB in November 2015 show that SMEs account for 99.9 percent of all private sector businesses. The combined annual turnover of UK SMEs totals £1.8 trillion.
Shortly prior to the referendum, business confidence plunged to a four-year low. Capitalise published research with PKF prior to the vote that revealed more than 40 percent of UK businesses felt Brexit had already impacted their investment decisions.
How can the Government reassure small businesses in the face of Brexit?
Communicating a clear, transparent strategy for Britain’s European exit will calm nerves and boost investment across a range of sectors.
Looking further ahead, the UK must also make the most of the opportunity it now has to govern self-sufficiently.
While certain EU ‘red-tape’ is likely to prevail as it negotiates trade agreements, this post-Brexit Government has the chance to execute policies and scrap regulations to benefit domestic SMEs. This is particularly relevant to businesses that do not rely on trade with other EU member states, who have – through the UK’s EU membership – still been subject to strictly imposed product regulations.
Similarly, a continued commitment to infrastructure investment will be crucial for small businesses. Burgeoning industries such as fintech need government support to compete internationally.
Our survey with PKF showed that 15 percent of small businesses had postponed entering into new business relationships in the months prior to the vote.
Uncertainty is the biggest threat, making the commitments made around matching EU investment incredibly important. All structural and investment fund projects signed before Autumn Statement will be fully funded, even when these projects continue beyond the UK’s departure from the EU.
Small businesses are crying out for more announcements like this. They need a clear picture of the future. Without this level of detail, small businesses cannot make forecasts and projections that are a key requirement to secure substantial investment or a business loan. They must pursue shorter term targets, using products such as invoice financing or asset-based lending to gain the financial support they need.
These are testing times where small businesses need access to a range of tools to help navigate choppy waters. The banks are running a range of programmes to support access to capital, new challenger firms are springing up and services such as Capitalise.com are making it easier to search and find finance.
The UK sits at a crossroads. Small businesses have the potential to lead the way. All they need now is to be given the tools to succeed.