Nearly six months after the UK left the EU’s single market, many businesses are still dealing with substantial changes to trading post-Brexit.
Despite a zero-tariff EU-UK trade deal agreement, increased red tape and new VAT and customs charges have challenged companies of all sizes.
Our Business Barometer research, which surveyed 900 SME decision makers, revealed that costs have increased for 42% and a third find accessing supplies and goods from the EU more complicated.
While our new relationship with the EU has added some friction to trade in the first half of this year, the right funding can help businesses during this initial period of transition and beyond.
We’ve worked with companies throughout this period to help them thrive, supporting them with invoice discounting and asset based lending solutions as they overcome supply chain disruption.
Cash flow solutions
Navigating highly complex supply chains takes time and money at the best of times, but when combined with new trading rules and expensive custom checks, it can significantly impact access to working capital.
Invoice discounting, which releases the value of unpaid customer invoices as soon as they are raised, can help to improve cash flow instantly. Many of the SMEs we work with have used it to bridge financial gaps when supply chain costs have increased.
We provide up to 90% of the value of your invoices up front and settle the balance, minus our fee, when your customer pays. One benefit of this is that it provides an initial cash injection, but it can also be an efficient way to finance your operations long term.
A reliable funding source
Alongside the impact of COVID-19, the period after Brexit changes has seen delays and increased expenses for both those that trade with the UK and those that don’t.
UK firms have reported shortages of everything from lorry drivers to building materials due to administrative and trading issues. Some have also seen a rise in late payments.
This uncertainty can put additional strain on cash flow, but invoice finance can offer a reliable source of funding.
Our IDeal invoice discounting platform releases funds in real-time with your ledger. This enables businesses to operate secure in the knowledge that income won’t be impacted by customer delays and provides the liquidity needed to manage disruption at short notice.
EU-based hubs
Other organisations have opted to set up sister companies in the EU to help them mitigate the impact of challenges created by working across different jurisdictions.
With funding experts based in both the UK and the Republic of Ireland, we can offer effective solutions on both sides of the border, enabling businesses to fund both their UK and EU entities with Close Brothers.
Our asset based lending products enable higher levels of funding to be raised than invoice finance alone. It combines an invoice discounting line with funds released against other assets on your balance sheet, such as stock, property, plant and machinery. We can also augment this with cash flow loans.
This type of funding can be used as a strategic tool to help you set up a new arm of your SME in the EU, restructure post Brexit or simply access more working capital.
