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Brexit Business

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Deal or no-deal, key uncertainties face many businesses

With the current situation following the series of recent votes and political shake ups delivering yet more uncertainty, businesses could be forgiven for a feeling of paralysis and being back to square one. Whatever happens in the coming weeks and months as the 29th March draws closer, SMEs cannot afford to be ‘caught short’ and this guide is designed to enable business owners and directors to safeguard their companies as best they can in the face of turbulence and uncertainty.

The UK is still scheduled to leave the European Union on the 29th March 2019, but with a ‘no-deal’ scenario still possible, there are still many unanswered questions which could leave businesses in the dark. Despite

the UK government producing a ‘nodeal’ partnership pack as well as a series of technical notices, there are still many key unanswered questions.

Ever-relevant however is the need to support British businesses with their preparations. With much higher-level decisions being the focus for most discussions, the business community could be forgiven for feeling like an afterthought. Yet, can our government afford to treat it like one? And, just because there are no clear answers, can businesses afford to wait for it all to play out?

There were 5.7m private sector businesses at the start of 2017, with small businesses accounting for a staggering 99.3% of all these, and 99.9% of those being small or medium-sized (SMEs). These businesses really are at the heart of our nation and form the backbone of our economy and it’s them that we must rally round.

BUSINESS COSTS AND BREXIT

What business costs could increase as a result of Brexit?

One thing that is at least true of Brexit is that we know about it in advance.

This gives businesses the benefit of being able to prepare for it to some extent. Our results show that only around half of businesses have begun preparation but something that all businesses should be doing is forecasting and predicting the potential cost increases that Brexit may inflict on their business.

By planning in advance, you can spot cash flow gaps before they happen and employ the correct use of external finance or source expertise, well in advance.

PLAN AND MAINTAIN

Continually keep your forecast up-todate and refer to it. A lot of us can be guilty of preparing a wonderful budget / forecast and then forgetting it for the next 9-12 months.

BE PRO-ACTIVE

If there are issues, cash short falls, then it is always better to seek professional assistance early rather than later. Easier to get funding, and better quality funding, the earlier you do it.

BE IN THE KNOW

Obtain as much information as possible so that you are as informed as you can be. Speak with your ExCo, your accountants and professional advisors.

Trade and Brexit

Mark heads up the trade finance offering at TFG where he focuses on bringing in alternative structured finance to international trading companies. Prior to joining TFG (tradefinanceglobal.com), Mark qualified as a lawyer with a top ranked global trade and structured commodity finance team. Mark has previously advised commodity trading firms, banks and alternative capital providers on international structured trade financings, pre-export, prepayment and limited recourse structures - notably in the oil, soft commodities and metals sectors. This has included mining finance projects, structured letter of credit facilities, receivables discounting and forfaiting agreements.

THE ULTIMATE BUSINESS GUIDE TO BREXIT

BREXIT AND TRADE

Navigating cross-border trade challenges around Brexit

In today’s turbulent geopolitical climate, there are many challenges facing businesses of all sizes. With Brexit looming, we need to continuously assess the opportunities and risk mitigation strategies that UK SMEs can take over the coming months.

Mark Abrams, Partner at Trade Finance Global, spoke about some of the larger challenges which trading firms face in the run up to Brexit, and what areas companies should start thinking about.

Large firms, operating out of multiple jurisdictions, have access to a wide network of buyers and suppliers. This diversified supply chain means that, should we end up in a no deal Brexit scenario, these businesses may see a slight impact on their P&L, but not of the scale and breadth of issues it could cause for smaller SME’s.

Firms have started stockpiling product and components, while preparing for transit delays in relation to imported products.

On the supply side, firms have started stockpiling product and components, while preparing for transit delays in relation to imported products. We have seen this in the pharma space, with many UK based labs sitting on specialist stock, which is often manufactured or imported from Europe. This also ties into the threat of heightened tariffs and potential complications around customs clearance. Analysing the operating methods of a company is critical to mitigate such risks.

Supply Chains are being rationalised and closely monitored. Just recently, Jaguar Land Rover announced that it was cutting staffing levels in parts of the UK to a three-day work week.