SECTOR FOCUS: SME’S
You can hedge against Brexit if you act now
By TIM JONES LL.B(Hons) Start Point Finance Ltd – FCA Regulated Commercial Finance Brokers and members of the NACFB
While the Brexit vote has brought more questions than answers there are some actions you can take to hedge against the potential impact on the UK economy and your own business. Though LIBOR rates have started to rise,
competition to write business has suppressed the financial institutions ability to raise their interest costs to customers. Greater flexibility around credit profiles and affordability away from High Street banks means that now is a great time to fix your future lending requirements. Invoice finance facilities are particularly affected as businesses with arrangements agreed over a year ago are not benefiting from the market changes and it is not in the interest of the lender to review. Confidential invoice finance or overt factoring has
‘If you tick
all the boxes the High Street Banks
businesses who historically would not have qualified and lending costs should be lower. Switching facilities has been made much easier and falls under the control of an independent body (ABFA) to ensure customers are treated fairly making the process similar to moving mortgage provider. Loan consolidation to take
should be the most competitive’
advantage of longer fixed terms at lower rates may also be worth looking at. If you tick all the boxes the High Street banks should be the most competitive as their costs of funds are low, however the growing availability of alternatives such as crowd based loans also have a place for many.
Assessing your alternatives should cost you nothing other than some time and the National
become an integral part of the lending landscape as banks rely less on personal security from directors and shareholders and more on the value of the sales ledger. Individual business processes and market sectors are becoming less important in setting commercial terms. This means that facilities are now available for
Association of Commercial Finance Brokers will point you towards appropriately qualified intermediaries to help. While the implications of Brexit may take time to
unfold, the real economic benefits of reviewing your business finances to take advantage of the current environment will be grasped if you act now.
May/June 2017 Chamber Profile 25
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