Intermediaries: Sky’s the limit MarketFinance: Elephant in the room

The elephant in the room

Advising your clients ahead of Brexit

Chris Findlow Head of Partnerships MarketFinance

The impact of coronavirus has been the focus of most businesses since we went into lockdown in March. Government support in the form of loans, grants and the furlough scheme have been a lifeline to many, but with funding coming to an end, business owners and their advisors need to be thinking ahead to the next challenge: Brexit.

At MarketFinance we’ve seen agility from SMEs across industries, and many businesses now have the opportunity to grow and expand. With the added complications of Brexit returning to the foreground and a trade deal less tangible than ever, it’s an important time to make sure your clients’ finances have the adequate support and facilities to weather all potential outcomes.

What Brexit means for your clients

Brexit could have longer lasting consequences on businesses than COVID-19. These will be unique to the UK, and the suggestion that the effects of leaving without a deal could be hidden behind a global pandemic seems short-sighted to me.

One of the biggest areas of uncertainty surrounding a no-deal Brexit are what tariffs and customs checks businesses will be subjected to. Defaulting to the World Trade Organisation rules will mean hold ups and financial uncertainty for many, as trading with the EU becomes more expensive and time consuming. Supply chains may also be impacted.

Assess their risks

Helping your clients understand which areas of their business are most at risk to the effects of a no-deal will be critical to their survival. Their financial planning needs to map out different scenarios and identify sources of funding they can rely on to make sure their futures are secure.

Adequate financing with flexible options will be of particular importance over the coming months and years. Lender risk appetite is weak at the moment, and with the end of government-backed, low interest CBILS facilities, SMEs are at risk of being left unsupported. Finding providers with a willingness to lend and a genuine interest in helping the UK’s largest group of businesses could mean the difference between success and failure.

Prove your expertise

In January, a YouGov survey found that four in ten SMEs didn’t feel ready for Brexit – coronavirus can only have exacerbated that. Uncertainty is the key word in discussions about Brexit. The most important thing to offer an SME client now is making sure they can be financially resilient against the impact of increased export duties and lengthy customs checks.

The ability to adapt to potentially chaotic change has been paramount for every industry. This is an opportunity to play a key role linking your clients to lenders who can help them with anything from loans and invoice finance to restructuring. “

In January, a YouGov survey found that four in ten SMEs didn’t feel ready for Brexit – coronavirus can only have exacerbated that