Are You Looking For Financial Help Post Brexit?

The people of Britain voted to leave the EU last July in an historic moment of British history. Article 50 was triggered on the 29th March officially beginning the process of leaving the EU.

But what does this mean for UK businesses?

As of the time of writing, the pound has become weaker at an international level. The consequence of this is that exporting becomes easier to do as other countries want to buy more of our cheaper products and services. The opposite effect is that products and services from other countries now become more expensive for us.

How To Get Finance For Businesses

Most maturing businesses will at some point need funding in order to grow.

Getting business funding can be hard work.

So Why Would A Business Want Funding?

Here are a number of reasons a business might want funding:

– Research and development
– Testing a new idea and bringing it to market
– Growing and expanding into new markets
– Addressing working capital challenges- bridging the gap between getting paid and paying parties in the supply chain
– Purchasing an office or commercial property

Here we list 3 innovative ways that business owners and CEOs are financing their businesses:

1 Crowdfunding

What is crowdfunding? Simply put, crowdfunding is a bottom up type of finance where consumers group together to invest in businesses or products. The aggregate of this can be used to finance business.

Some record deals and extraordinary business funding feats have come out of crowdfunding. Examples include;

– The Ice Bucket challenge was a charitable fundraising campaign, raising $115m for ALS research
– The pebble e-paper smartwatch raised $20m on Kickstarter from over 78000 backers
– The App-only bank Monzo has raised £1 million on Crowdcube in just 96 seconds in March 2016

What’s in it for the people?

It varies. Some crowdfunding platforms are ‘feel good’ investments – many investors are philanthropic and donate for the greater good. Others aim to give people returns – investors are able to own equity in a company and cash out at a later stage.

2 Invoice finance

Many businesses are constrained through working capital issues meaning there is a payment gap between receiving payments and paying for costs. Invoice finance is fairly innovative, and is now fairly common in the market, thanks to disruptors and new finance providers who are able to fund invoices up front, in real time.

Invoice finance allows companies to worry less about waiting for payments, and some options allow the financier to chase up payment on behalf of the company.

3 Trade finance

Trade finance is the new funder on the block. 31% of businesses expect exports to grow, according to the FSB.

Trade finance is an umbrella term used for the financing of any import or export of goods / services overseas. Many businesses trade in multiple countries, and the financing of this can be hard, especially when figuring out whether to trust a supplier or an end customer. Fortunately trade finance provides several mechanisms to fund this growth through Letters of Credit (a bank will own your stock or goods whilst it’s transported between a supplier and a buyer), or through warehouse finance.

So What Happens Next?

Brexit brings a lot of uncertainty to UK businesses but effective cash flow management and appropriate funding measures to ensure the company can continue to grow and service clients and customers is essential.

Be sure to look into different finance products and look at what is most appropriate for your company when considering options.


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