A huge amount of uncertainty still surrounds Britain’s decision to leave the EU, but the nation’s small businesses are determined to weather the coming storm with the minimum amount of fuss, according to the results of a recent survey.
However, when it comes to small business finance, it seems that most would rather avoid the burden of additional debt. Many are choosing not to invest in further growth until a stable economic future outside the EU seems likely.
More than half (53%) of UK small businesses with nine employees or fewer say they feel Brexit won’t have any impact on them. 44% also say that they have seen no change to their profits so far and only 21% have seen profits fall.
It is apparent, however, that Britain’s businesses have dramatically scaled back their plans for future growth. Just 42% expect their business to grow in 2017, compared to 55% at the end of last year and 63% at the end of 2013. Only 10% expect to take on new employees, compared to 38% in 2013.
Business holding fast
This seems to indicate a battening down of the hatches and a decision to drop anchor and assess what is ahead, rather than sailing merrily on. However, at the same time, there’s no inclination to retreat, and no sign of serious fears that businesses will be capsized or go under.
In the Autumn Statement, the Chancellor announced that the British Business Bank would be making an extra £400 billion available for funding. However, it seems that small businesses are reluctant to take on a major loan, however generous, without further reassurance about the state of the economy.
Instead, while 28% of small businesses will be seeking extra finance in the New Year, this will mostly be in the form of overdrafts and standard loans in order to survive at their current level, rather than for investment in growth. Just four per cent of those seeking small business finance will approach government-backed schemes and only 0.8 per cent said they would approach the British Business Bank.
This cautious approach is entirely understandable; businesses need to reduce their risks and make sure they’re on solid ground before they commit to expansion.
Comprehensive business insurance seems more vital than ever in the current climate, including business interruption cover, full liability, and legal expenses insurance. Reliable independent financial advice is also invaluable and Alan Boswell Group will continue to support its small business customers whichever way the wind blows in the post-Brexit business world.