Finance · 3 March 2017

Micro business owners cut investment by three-quarters as they anticipate Brexit

Franchise Finance
Micro business owners have been advised to use physical assets to protect from economic damage
Owners at the UK’s smallest firms are planning to severely cut investment in their business in response to potential economic uncertainty surrounding Brexit, according to new research.

A micro business survey by Lloyds Bank found that owners of companies with under 1m turnover expected to invest an average 21, 690 over the next six months a 75 per cent drop of the 83, 560 drawn from the same survey in July 2016, just one month after the EU referendum.

Identified by almost a third of business owners, economic uncertainty? was found to be the greatest single reason for investment cuts.

Commenting on the plans to cut investment, Jo Harris, managing director of Lloyds? Retail Business Banking warned that sudden cutbacks could have a detrimental effect on business growth.

?[Business owners] need to be careful that in cutting back on investment to boost resilience they don’t put the brakes on too hard, and end up slowing their growth by not investing in new physical assets like equipment and stock, she said in a statement.

Harris emphasised the importance of assets in preparation for uncertain economic times.

by maintaining a high proportion of assets that they own outright, business owners can build a strong capital position, providing a buffer to any economic shocks, she advised.


 
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ABOUT THE EXPERT

Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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