New research suggests Britain’s small firms are shrugging off the uncertainty created by the decision to leave the European Union.
A study carried out by the National Association of Commercial Finance Brokers (NACFB) has found that, far from being damaged by the prospect of Brexit, business confidence appears to have proven resilient, with funding enquiries surging over recent weeks.
The NACFB says its online SME finance platform, which matches businesses with both high-street and specialist lenders, has processed more than £20 million worth of funding requests since the start of August – double the level seen over the same period last year. The average loan size requested so far this month has been £128,000, a sharp rise on the £73,000 recorded in July and higher than June’s £94,000.
Adam Tyler, chief executive of the NACFB, said:
“August is typically a quieter month for funding applications, but businesses aren’t procrastinating, and are showing a real appetite for growth, even with the uncertainty surrounding our future relationship with the EU.
“UK SMEs are the lifeblood of this country, but if they’re going to take advantage of the opportunities presented post-Brexit, the alternative funding sector has a vital role to play, particularly as we look to broker new trade agreements with countries outside the EU.”
The NACFB’s figures come shortly after the Bank of England revealed it was taking drastic measures to boost economic activity in the UK in the face of a potential Brexit-induced slowdown. As well as a cut in the base rate to an all-time low of 0.25%, the Bank has launched a new round of quantitative easing designed to cut borrowing rates and encourage the country’s major banks to increasing lending volumes both to businesses and consumers.
However, Tyler added: “It’s also important that the government drums home the message that there are many routes that SMEs can take to find funding. There is some caution out there about who is lent to, but there are more lenders than there’s ever been in the commercial finance sector who are happy to provide finance.”
The news that many small companies appear to have retained their appetite for borrowing and investing could reflect the fact that there have been very few clear signs as to exactly when the UK will complete its exit from the EU.
The British government has yet to invoke Article 50 of the Lisbon Treaty, which would be the first formal step in the two-year process of leaving Europe. Recent press reports have suggested that Article 50 may not be triggered until after French and German national elections in the first half of 2017, which could mean that Brexit would be delayed until 2019.