SME access to finance post Brexit

The then Prime Minister David Cameron’s proclamation in January 2014 that “we need to be a country that celebrates enterprise, that celebrates risk taking, because that is where the growth, the jobs, and the future are going to come from” highlighted the importance of SMEs to our economy.


A brief glance at statistics from the Federation of Small Businesses illustrates this point: as at the start of 2015 there were a record 5.4 million SMEs, accounting for 60% of the UK’s private sector employment, and 47% of all private sector turnover in the UK.

When the recession bit in 2008, access to finance became an ongoing problem. In the midst of the recession, in the second quarter of 2013, four in ten small businesses were turned away for credit. Prior to the Brexit vote, there were encouraging signs that the purse strings were finally loosening: £29.2 billion of new SME borrowing was approved in 2014, a 9% increase on the previous year. Around 8 out of 10 finance applications from SMEs were approved in 2014. However, the number of applications from SMEs slowed during the same period whilst their bank deposits increased, which may indicate a “once bitten, twice shy” lack of confidence on the part of SMEs of being accepted.

Post-Brexit vote, and in the midst of the uncertainty created by it regarding if/when Article 50 will be triggered, and how the UK’s post-EU economy will look, the economic situation remains finely balanced. Notwithstanding some pre-Brexit encouraging indicators relating to SME access to finance, the post-Brexit landscape is uncharted territory, and undeniably challenging for small businesses.

What can SME owners do in such an environment? The following may help your business to survive and maximise its potential in the uncertain years ahead:


  • Financing | If unable to obtain bank lending have all avenues, such as invoice factoring, private equity, venture capital etc been explored?;
  • Commercial contracts | Seek high quality professional advice when negotiating your commercial contracts to ensure you get the best possible deal for your business;
  • Credit control | Robust credit control procedures are vital to maintaining a healthy cash flow;
  • Internal administration & constitutional documents | Is there a suitable shareholders’ agreement in place? Are your articles of association and directors’ service agreements fit for purpose? These can be key to avoiding costly litigation in the event of e.g., shareholder disputes;
  • Employment & HR | Effective HR advice and employment policies can help to head off costly and time-consuming employment-related litigation;
  • Share schemes | Offering a stake in the future success of your business may help to recruit or retain key staff at a time when your salary budget is squeezed.

We offer a full range of commercial advice to help you run your business as successfully as possible. If you would like to discuss how we could help you please do not hesitate to contact us.