Barclays launches fund to help small businesses through Brexit

A new Brexit date of 12 April 2019 is the Government’s current target to get Parliament to agree to the Prime Minister’s deal. It has now been voted down three times, and a series of non-binding indicative votes have been on the table over the last week.

The votes of 1 April appeared to show that MPs are still divided over the best way for the UK to leave the European Union (EU). Whatever happens, and this could feasibly include a General Election, a People’s Vote, a customs union agreement or a no-deal Brexit, the small business sector must look ahead.

How a new fund will help small businesses through Brexit

To help the increasingly vital SME sector in the UK navigate the challenges brought by Brexit, Barclays has announced a new fund. It offers overdrafts, mortgages and loans to UK SMEs, as well as growth funding and cash flow.

Worth £14.7 billion, the Barclays Brexit fund is designed specifically to help small and medium sized businesses negotiate Brexit and plan for a future outside of the EU.

The fund will offer:

  1. Commercial mortgages, overdrafts and business loans up to a quarter of a million pounds working capital.
  2. Loans for innovate start-ups and established companies seeking capital, environmental investment and growth funding.
  3. Cashflow funding for investment in management buy-outs, growth and acquisitions.

The fund takes advantage of the Enterprise Guarantee Programme. This is backed by the Government and is designed to encourage lending to small businesses by offering guarantees from the British Business Bank. It will be available to small and medium sized businesses that have a turnover worth up to £25 million.

And it’s not the only thing Barclays is implementing to deal with specific challenges caused by Brexit. The bank is running more than 100 SME seminars and clinics about Brexit across the UK. They will help businesses plan for managing their cashflow and working capital, how they will manage potentially restricted access to workers, supply chain management and exporting services and goods overseas.

Businesses divided on Brexit

Just as MPs are split on the best way to deliver Brexit, research shows that the business world is also somewhat divided. A survey from the Institute of Directors shows that almost two-thirds of small businesses would like to see a Brexit deal that allows the UK to be closely linked with the single market.

Its research finds that 58% want the UK to stay aligned in goods, and 60% in services. A similar number of small business owners (56%) say that they want a Brexit deal that makes sure the UK can align tariffs with the EU’s. The research targeted 1,400 IOD members between 14 and 21 March 2019 and could well have changed since the votes by MPs on since then.

While minds are changing all the time as events develop, businesses remain split on the length any potential extension period should last. Half say that there should be a short extension of no more than three months, while 40% say they want at least nine months.

James Turner, Managing Director of Turner Little Limited, says: “There is no doubt that MPs are currently dealing with important and difficult decisions. While the small business sector doesn’t have a completely unanimous view of the best course of action, it’s important that we all accept the risks and opportunities inherent in every course of action.

“Brexit presents the country with a unique, unprecedented opportunity for real, lasting change. It’s the small and medium sized business sector that will do the most to shape the change. This includes entrepreneurs, start-up owners, Fintech disruptors, builders, farmers, manufacturers and many others.

“It’s encouraging to see moves from the Government and the big banks that offer tangible assistance to the small business sector as it navigates the choppy waters of transformation. The fund from Barclays recognises that SMEs form the backbone of the UK’s economy, and that they are integral to a stronger, united country outside of the EU.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

What small businesses can do to prepare for a no-deal Brexit

Many small businesses in the UK are already planning for Brexit. Whether it happens on 29 March as planned, or there is a delay on Article 50.

At the time of writing, the Government is renegotiating the deal put forward by the Prime Minister. The possibility of a ‘no-deal’ Brexit is on the table, as far as it’s possible to ascertain. And of all of the Brexit possibilities, a no-deal scenario is the most difficult to prepare for.

Small businesses should prepare for changes

In many ways, planning for Brexit is the same as making any other business decision. It’s about managing risk, and all small business owners are familiar with planning for the unknown.

While Brexit is a new scenario for small business owners to deal with, there is no reason why steps can’t be taken to manage the risk. You should be aiming to make changes that have the largest possible benefit at the lowest possible cost. Recent research shows that 4% of 130 small businesses surveyed have started Brexit planning, and 80% have not yet made any changes.

‘Wait and see’ may well be enough for many small businesses, particularly those not involved with trading with countries within the EU, but proactive steps to manage potential risks is always a good idea.

Simple steps to take

Small business owners should consider Brexit in the same way they do any other time of uncertainty. It’s important to reassure suppliers, clients and employees that it’s business as usual for the most part. While there may be some changes and possible delays, all businesses in the UK are working to make sure they run as usual.

Assessing which business activities might be impacted by a no-deal Brexit is the next stage. Businesses should begin by understanding the different types of sales and purchases they make and learn the physical and legal flow of trade. A no deal Brexit is likely to include a customs border creating between the UK and other countries. Therefore, businesses that trade in goods will be most affected, and can expect changes to importing and exporting processes and a possible increase in VAT and customs duty.

Service businesses are likely to be more affected by access to the labour market and regulatory changes. It’s a good idea to plan future employee needs in order to work out how much freedom of movement could affect it.

Five actions small businesses can take now to prepare for a no-deal Brexit

  1. Learn the impact of likely regulatory changes

Will you still be able to sell your services and goods in the EU and vice versa? If not, find out Government advice on what you can do about it. It’s possible that an EU presence will be needed to satisfy regulatory requirements.

  1. Think about incorporating an EU company

This is easier and cheaper than you might think. Ireland will be the largest English-speaking country within the EU post-Brexit. Having a subsidiary or overseas office there or in another EU country will mean your business has a legal presence within the bloc. If you go down this route, consider how this will affect the infrastructure of your business.

  1. Open a bank account in the EU

In the short term, it could be useful to have a bank account within the EU. Opening it now will mean you’re ahead of a potential rush to do so after Brexit and could save hassle down the road.

  1. Apply for an importer reference number

As the UK is currently part of the Customs Union, businesses don’t need to ‘import’ goods. A no deal Brexit would change this, and the UK will need to import and export goods with the EU. This means your business will need an EORI (importer reference) number.

  1. Check workforce needs against your business plan

If your business employs lots of EU workers and you’re expecting numbers to drop, how will you deal with the deficit? Consider apprenticeship schemes and how you will source employees.

James Turner, Managing Director of Turner Little Limited says: “The key for small businesses in preparing for a no-deal Brexit is to remain calm, take a ‘business as usual’ approach, but ensure sensible steps are taken to mitigate potential problems. A no-deal Brexit is difficult to prepare for, but while we wait for clarity from the Government, it is important to start preparing now. For those UK based companies trading with the EU, either selling there or sourcing product from there, the suggestion of incorporating an Irish company is both sensible and relatively inexpensive.

The leave date of 29 March 2019 is fast approaching, and while there may be a possibility that Article 50 will be extended, we just don’t know. In the meantime, making adequate plans for importing and exporting and ensuring workforce numbers can be retained remain the most important steps for small businesses. Those companies that don’t rely on importing from or exporting to the EU may find that the impact is negligible, but for those that do, following this advice could make the transition out of the Customs Union easier. Brexit should be seen as an opportunity for small businesses in the UK, as we stand at the cusp of a new era for the country.”

About Turner Little
Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

What small businesses will thrive after Brexit  

According to media reports, the UK Government is still trying to thrash out a deal for leaving the EU in 2019. While some accuse coverage of scaremongering, others are concerned about the increasing likelihood of a ‘no deal’ Brexit and what that could mean for the economy.

Whether the UK leaves with a deal or not, it seems that things will change for businesses and people investing in certain asset classes. For example, it’s likely that financial services businesses that rely on easy access to the European market will suffer. However, there will be winners too. Specifically, the opportunities presented by Brexit to small businesses.

SMEs could form the backbone of the economy post-Brexit, and the Government is certainly taking this stance. For those looking for financing, there are positive options such as the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS). This is because we are witnessing a time in the market where businesses are looking for investors, and investors are seeking out opportunities, leading to a ‘sweet spot’

Investment opportunities

Small and growing businesses offer investors the kind of opportunities that will continue to appeal after Brexit. These are the businesses that will flourish when the UK has left the EU, for various reasons.

The first is that they often operate in niche areas, specialising in specific sectors or services. This gives a measure of protection against any Brexit fallout, as they will still have that niche afterwards. Small businesses are also agile, flexible and able to adapt quickly to changes. This is one of their standout advantages over corporate giants.

Smaller businesses have an ability to pivot quickly, if necessary. Should circumstances demand a change in product or service, they are better placed to do so without enduring major adverse effects on their bottom line.

Strong Government support

The final reason for small businesses’ strong position as the UK heads towards Brexit, is the Government’s support. There is a renewed vigour in the support for entrepreneurship and innovation since the Referendum. Ministers are increasingly keen to encourage small businesses to continue to innovate and exploit niche opportunities, and to expand into larger markets.

In the current market climate, smaller firms that are potentially disruptive are increasingly attractive to investors. Entrepreneurship is at the heart of growth businesses, and the opportunities for financing are stronger than ever right now. The support available is not limited to funding, as many investment funds are providing mentoring which can be just as important as the funding itself.

James Turner, Managing Director of Turner Little Limited says: “These small, disruptive, niche businesses will form the economic backbone of the UK after Brexit. There is no doubt that the economy and market is experiencing a time of uncertainty as we wait to find out the Government’s final exit deal, but small businesses can mitigate the risks by securing funding and mentorship at the same time.

“SMEs must also retain their flexibility and ability to adapt to a potentially fast changing market. The reality is that no-one can yet forecast exactly what will happen to any business sector when the UK is out of the EU, but by focusing on being adaptable, agile and staying alert, small businesses can weather any potential storm.

“As we approach Brexit, investors should be turning more to these kinds of businesses, as they offer the best chances of thriving in the new, post-EU business landscape.”

About Turner Little

Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

How prepared are small businesses for a potential ‘no deal’ Brexit?

The closer we get to the date specified for Brexit, which is scheduled for 29 March 2019, the more unclear it all appears. With the Conservative Party Conference underway now, and Prime Minister Theresa May apparently facing revolt from both ‘Remainers’ and ‘Brexiteers’ in her party, there has been much media speculation that the UK will be heading for a ‘no deal’ Brexit.

And while it’s also unclear how prepared anyone is for this scenario, according to research from the Federation of Small Businesses (FSB), few have started serious preparations.

No deal, no problem?

Just 14% (one in seven) small businesses has begun planning for the scenario of a no-deal Brexit, according to the research. The FSB’s report shows that while another 41% of small businesses think that a no deal Brexit will adversely impact their business, they haven’t yet started planning in real terms for this eventuality.

One in ten small businesses (10%) said that they think a no-deal Brexit will have a positive effect on their business. On the other side, nearly half of small businesses in the UK (48%) think that a no-deal style Brexit will negatively affect their ability to do business.

When considering small businesses that trade with the EU, this figure increases to 66%. For SMEs that employ people from the EU, 61% think no deal means problems ahead for their business.

Planned actions

As well as discovering the percentage of small businesses who are concerned about the potential impact of a no-deal Brexit, the research also breaks down what they’re planning to do about it.

It shows that just over a third of small businesses (35%) are planning to postpone major innovations, research and development and businesses decisions. Just over a fifth (21%) of small businesses likely to be affected by a no deal Brexit will be cutting expenditure and staff between now and the time the UK leaves the EU.

Michael Watkinson, FSB Development Manager for Nottinghamshire and Derbyshire, believes the findings show that small businesses are not prepared for the potential chaos that could arise from a no deal Brexit. He said: “Looking at this research, it’s obvious that our small firms are not prepared or ready for a chaotic no deal Brexit and the impact that it will have on their businesses.”

The Government appears to confirm that a no deal Brexit is likely, with Dominic Raab, Secretary of State for Exiting the European Union, saying today (1 October) that the UK could be “left with no choice but a no-deal Brexit if the EU tries to lock us in to a customs union”.

Government support

James Turner, Managing Director of Turner Little Limited said: “Small businesses that sell products to the EU, rely on employees from the EU or buy products from the EU are understandably concerned at how a no deal Brexit could affect them. It’s clear from research like this that many feel they are in the dark about what to expect and how they should prepare for it.

“It’s particularly concerning that small businesses are electing to delay business decisions, stopping investment and, perhaps most problematically, cutting staff. Small businesses form the very backbone of the UK’s economy and the Government must listen to their concerns as we head towards Brexit.

“With so much unclear it’s not surprising that SMEs haven’t started preparing for Brexit, as no one knows what to prepare for. In the ideal scenario at this stage, the Government would talk to and work directly with the small business sector in the UK to make sure that they are properly supported if a no deal Brexit continues to become the most likely scenario.

“We only have about six months until exit day, so it’s very much a race against time to avoid a situation where the UK will crash out of the EU in a way that will damage small businesses. It will be interesting to see what arises from the Conservative Party Conference as this is a key time for the Prime Minister’s current plan.”

About Turner Little

Founded in 1998 in Yorkshire, UK, Turner Little is a specialist UK and offshore company formation, banking and corporate services provider. Our services include company formation, UK and offshore banking, asset protection, credit correction/repair, trademarking and trusts. Other services include Internet services, mail forwarding, wills and probate. Turner Little’s vision is to offer the best possible service, together with market leading products.

Turner Little