Business Borrowing Post Brexit
Brexit. Whether you voted for it or against it, thought it would happen or wouldn’t happen. The fact is that Brexit has been voted for and we are entering a brave new world. The SME community will adapt, evolve and move from a position of uncertainty to a position of opportunity.
The question I am being asked is whether the Brexit vote will impact on the availability of borrowing to the SME sector. It is something I have gone to lenders to ask, this is the response received and a guide to what the post Brexit lending market will look like.
Adam Tyler, Chairman of The National Association of Commercial Finance Brokers (NACFB) said:
“As the dust settles we can see a positive picture emerging. Lenders have dismissed the fears that a 2008 style recession could hit us, due to the stronger position that the banks are now in with resilient balance sheets and liquidity levels that will weather any short term storms.
Never before has there been such a variety of finance products available to help British business tackle any short term challenges. Inevitably with increased choice there grows a greater need for professional advice, something that is becoming increasingly understood by businesses and lenders alike”
The sentiment that commercial lenders are undeterred is further enforced by comments from one of the new lenders into the SME sector. Rhydian Lewis, CEO of Ratesetter told us:
“The debate around UK membership of the EU is vigorous and often confusing. However, you should expect it to be business as usual with RateSetter…We are well-positioned to thrive either way”
The message coming through is that if businesses want to raise finance then there is a genuine appetite among lenders to structure deals, whether the UK is inside or outside the EU.
Will The Be Changes To Criteria?
The answer to this is that there are always changes to criteria. Sometimes borrowers get too caught up in lender criteria, if what you want to do doesn’t fit the lender’s criteria then it is not the criteria at fault, you are simply using the wrong lender. In a Brexit world lender criteria will change just as it did before 23rd June.
The answer to this remains as it always has, take advice, talk about what you really want and let an expert find the right solution for you.
When I asked a commercial lender about lending policy and criteria I was advised;
“…being on the front foot with our introducers is important – reassuring them that we are continuing to support UK plc today just as we were doing yesterday…”
In other words, business as usual.
There may be uncertainty and some hesitation from SMEs is to be expected, however there remain great finance options out there. The business lending market has got more competitive over the past 18 months and I can see no reason why this will not continue. The message is clear that the UK business lending market is active and lenders are keen to demonstrate that post referendum they are keen to lend.
By Dave Farmer
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