Over the last few months, uncertainty has dominated discourse amongst UK businesses. Here, chief executive at the National Association of Commercial Finance Brokers (NACFB), Rob Lankey, finds some reasons to be cheerful about Brexit.
The aftermath of the Brexit vote offered no immediate answers as to what the economic landscape would look like, and even now the process to leave the EU has formally been triggered, economists have been unable to arrive at a consensus about what this means for business.
Look at this through the filter of a Donald Trump presidency – and his yet-to-be-defined international business policies – and it’s no wonder that companies in the UK have been feeling held hostage to wider economic and political mechanisms.
Having said that, the canary has been yet to fall off its perch – quite the opposite in fact. Economic indicators have remained steady across the board, consumer confidence hasn’t suffered as predicted, unemployment continues to drop and wages have carried on growing faster than recent average inflation rates, even if the gap has thinned in recent weeks.
New car registrations, too, remained broadly flat in February – only dropping 0.3 per cent – which says more about consumers holding off for the 17 plate than it does about consumer confidence in general.
On top of this, the construction industry has risen overall for a consecutive six months up to February 2017, while house prices continue their steady march upwards.
Doom-mongers have been waiting for the bottom to fall out of the boat, but as the months have passed since 23 June 2016, the four horsemen of the apocalypse have resolutely refused to ride into town.
This tallies with what we’ve been seeing on the ground. Our broker members have continued to see small business owners applying for funding and looking to grow. We reported at the end of last year that applications for commercial mortgage funding were up 132 per cent on the previous year – by their very nature, business mortgage enquiries provide a good indicator of small business’long-term financial appetite.
Having been in the industry for over 25 years, it feels like we’re in the boom period of the mid-naughties but without the silly frothiness that precipitated the financial crisis.
Brokers continue to expand and lenders are still joining the market, keen to pick up on small businesses that are hungry for finance. In short, there are plenty of opportunities for businesses to find funding, as long as they are willing to look around.
Of course, sentiment remains key. Negative press fuels caution amongst small business owners – even if appetite for finance is strong, a flurry of downbeat media will invariably prompt company owners to think twice about funding growth. There’s every chance we could risk talking our way into a recession.
Consequently, businesses have a responsibility to stay positive about their prospects, especially now Article 50 has been triggered. This is now the new normal, and with it comes plenty of opportunity for smaller firms.
It’s now more important than ever for small businesses to remain aware of the variety of funding options that are available to them. With lenders and brokers continuing to enter the market, there are plenty of options for small businesses should they choose to explore options outside of their primary banks.
This is also a boom period for exporters, for whom the cost of doing business has just become more affordable with the falling of the pound – this is a large proportion of the small business landscape, as 63 per cent of small businesses trade internationally, according to recent statistics.
It’s easy to become lost in the hysterical headlines, but if you look at the detail, the prospects for businesses at least in the short-term are rosy. This boom in lenders and brokers reflects a bullish landscape for lending to small business owners if small employers are willing to shop around for the best deals.
Rob Lankey is the chief executive at the National Association of Commercial Finance Brokers (NACFB).
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