The Bank of England Governor has highlighted a lack of preparedness in the UK export sector for a post-Brexit trading environment. Large businesses have the resources to adapt quickly but smaller firms are more vulnerable. Alternative finance can help them manage the costs.

Speaking recently on the implications on a no-deal Brexit, Mark Carney claimed that as many as 150,000 British businesses do not have the paperwork in place to export to the EU should the UK leave without a deal in place. He also commented that only 40% of 250,000 exporters were prepared.

While opinion is divided on the future of the UK and the EU, and how the country should approach any exit strategy, there is broad agreement that the continued uncertainty is having an increasingly harmful impact on the economy and the businesses behind it. Tellingly, according to an analysis of UK Department for Business, Energy and Industrial Strategy data, more than a million SMEs UK small businesses see Brexit as a major obstacle to success.

Regardless of the personal preferences and the fact that there is a chance that Brexit won’t happen,  small businesses that export goods and services to the EU should be fully prepared for the various market possibilities that the future may hold, including if the UK leaves the EU without a deal. To this end, while there is evidence that some firms are trying to protect themselves, at the same time, as the Bank of England Governor’s comments make clear, there are plenty that are dragging their heels.

One of the main reasons behind this lack of preparation must be cost. Putting the necessary paperwork in place and preparing systems and infrastructure so that continuity can be maintained in the event of any form of Brexit takes time and resources. And for under-pressure small businesses battling significant market headwinds and managing a raft of other costs, these commodities are already at a minimum.

This is where alternative finance can help.

In the wake of prolonged caution from traditional lenders, a position that Brexit is helping to entrench, alternative finance facilities such as invoice finance, asset finance, peer-to-peer lending and crowdfunding are providing small businesses with access to capital for vital investment, including in the resources needed to review and prepare operations for a future outside of the EU.

This is how a small business in Sussex used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to raise the capital to invest in new equipment and resources.

While uncertainty remains it is easy to understand why many exporters to the EU aren’t prioritising preparation for a no-deal exit. Nevertheless, planning is required, in particular for smaller businesses that are more vulnerable to any disruption in trade. To afford the costs, these firms need to be aware of all the funding options available to them, including alternative finance.

To find out more about A&T Business Associates services, contact Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.