A Brief Brexit Background:
The UK officially came out of the European Union on January the 1st of 2021 but let’s have a brief look at how Brexit came about in the first place before diving into Brexit and Finance. The UK’s relationship with the rest of Europe has been a longstanding and divisive one from the get-go. Britain joined the EEC (Now the EU) in 1973 but only 3 years after this there was already a Referendum on membership. This result showed a desire to stay in the EEC at the time, with 67% voting in favour of staying. To read more about the history of EU and UK conflict you can click here.
Brexit is short for ‘British exit’, the UK voted to leave by 52% in the June Referendum of 2016. The 2016 vote came after then Prime Minister, David Cameron, promised a vote on EU membership in 2013, back then he was almost certain that the ‘Remain’ outcome would win. By the time of the Referendum in 2016, the political landscape had changed to the point that ‘Leave’ was slightly more favourable. Since 2016, negotiations have been taking place between the UK and other EU nations – these discussions were mainly over the deal the UK would establish once left. To read more about this, click here.
With the combination of Brexit and the recent pandemic, the UK has witnessed a series of issues related to supply, lorry driver shortages and fuel problems, this will be explored below.
The Effects of Brexit Combined with Covid:
The UK is currently facing a shortage of lorry drivers which, as a knock-on effect, has caused issues with food supply, fuel supply and energy companies. As will be explored further in the piece, us in the finance sector are more than happy to help!
As well as lorry driver and supply shortages, there has also been an effect on the brewing industry, Close Brothers, a trusted member of our panel of funders, wrote an educational piece on that here.
In relation to lorry drivers however, the government has decided to introduce temporary visas for 5,000 fuel tanker and food lorry drivers in the run up to the busy Christmas period, it has faced calls to do so after growing concerns about shortages.
The Road Haulage Association (RHA) estimates there is around a shortage of more than 100,000 qualified drivers in the UK. This includes thousands of drivers from EU states who were previously living and working within the UK.
Covid, combined with Brexit, an ageing population, and wage concerns have all impacted the driver shortage. As travel became restricted last year, many European drivers went home, very few have returned due to new laws on visas and immigration. The rest of Europe are also facing a driver shortage but due to many being members of the single market, they have not seen the effects as harshly as the UK. To read more about this click here.
Insight From Financial Experts:
Have no fear however! While the above all sounds rather daunting, from talks with members of our panel of funders, I’ve seen first-hand how the finance sector is busier than ever helping fund your financial needs. Many I have spoken to have noted they are working harder than ever to fund deals in recruitment, haulage, and supply chains on a bespoke, case-by-case basis to help get business back on track! I contacted some of our own team at Goodman and some of our lenders to highlight the finance sector is more than happy to help.
Our Group Sales Director Stefan Radymski, commented on how this is not a time for fear by stating that: “18 months on and the doom and gloom never arrived! Financial services have remained very strong and speaking with our leading lending partners and professionals many organisations are carrying on as if Brexit has not happened. Funding remains robust and at present thus far we have seen no sign of ‘The Brexit Impact’ on obtaining funding for our clients.”
365 Business Finance:
Linking with this theme, when contacting our lending panel, a similar message was noted. 365 Business Finance comments: “Together with our lending partners, the past few months has seen 365 support a record number of Business Owners with working capital. Whether it be Brexit or Sector Staff shortages, what continues to impress is how UK Business find ways to thrive not survive” – Chris Thorne, Strategic Partnerships Director, 365 Business Finance.
Tony Smedley, Head of SME Business Development for Channel Capital also noted: “we too have recognised the issues that Brexit has created. We have seen that UK SMEs are facing various struggles when now dealing with the EU in terms of delays, red tape, increased costs (even though most trade is supposed to be tariff free) and VAT complications. Some of the larger EU based customers are telling SMEs that if they wish to continue to supply them then they may have to supply from within the EU itself. This means that some of these SMEs are looking to set up in mainland Europe to reduce these issues. This is where Channel Capital comes in, we have provided and will continue to provide finance to such SMEs as our niche means we have the capability of funding both the UK entity and the Dutch, Belgian, or German subsidiary. This removes those concerns created by having to find a European lender.”
Finally, we got in contact with Close Brothers who stated: “Following the uncertainty leading up to Brexit, many of our customers bounced back when the Withdrawal Agreement came into force. We took time to help the businesses we work with access the funding needed to navigate new operational requirements and found that preparation was key to ensure continued trading and maintain strong supplier and customer relationships. In the months since the UK left the EU, we’ve continued to provide finance solutions to both large companies and SMEs across all sectors. This includes invoice discounting and asset-based lending facilities which release the value of unpaid customer invoices and other assets on a firm’s balance sheet. Our solutions have helped clients increase cash flow, support import and export requirements, and mitigate challenges caused by Brexit and COVID-19.” Martin Baker, Deputy Head of Commercial Sales – Midlands at Close Brothers Invoice Finance.
How We Can Help with Your Finance Needs & Concerns:
If you need finance and you’re unsure of where to go, you can speak to one of our in-house experts. We pride ourselves on full UK coverage, and around 100 year’s combined experience within the Goodman Team!
As industry leaders in Asset Based Lending and having won Invoice Finance Broker of the year, we have built a reputation for our outstanding services and a client centric approach. Our brokers can confidently conduct a full business finance review and offer one of the best, well-vetted lending panels in the UK Market.
We offer financial planning for cashflow gaps, MBO, MBI, acquisition finance, capex or property purchase. We have also have long and successful track record of supporting all sectors from construction, engineering, manufacturing, recruitment and many more! To read some of our case studies that attest to this, click here.