How can commercial finance help businesses prepare for a ‘No-Deal’ Brexit?

No deal brexit
According to the Close Brothers Business Barometer, two thirds of SMEs believe that a no-deal Brexit will have implications for their business, but many are making plans to continue as usual in 2019.

SMEs responding to our survey cited a range of issues related to Brexit, including increased costs on exports to and imports from the European Union, and apprehensions about staffing shortages.

However, while companies are aware of the challenges they could face, many remain optimistic about the future and are still trading despite wider political worries. In fact, 92 per cent of businesses expect to perform steadily or see growth over the next 12 months. 

Ambitious SMEs will therefore be considering the best way to secure the funding they need to be successful and, although commercial finance may have previously been seen as contingency planning, alternative options could be a viable way for firms to achieve their growth plans during this challenging period.

Here, we consider three ways that alternative finance could help enterprises to thrive whatever the outcome of Brexit:

1. Use invoice finance

60 per cent of SMEs plan to seek funding over the next 12 months, but many are being cautious due to the current political climate. Invoice finance could provide a prudent alternative way to ensure working capital stays steady.

Invoice finance gives a company access to cash tied up in unpaid invoices. As soon as an invoice is raised, we can pay you up to 90 per cent of the value, giving you fast access to funds. Then, when your client settles the invoice, you get the remaining balance less an agreed fee.

By using owed invoices as security, businesses can be assured that they will not outgrow their funding pot or borrow beyond their means. The credit available is directly related to the value of an enterprise’s sales ledger and fluctuates in line with the invoices raised.

We offer two kinds of invoice finance. Invoice factoring gives companies the support of our expert credit management team when collecting invoice payments, while invoice discounting can be completely anonymous and allows businesses to arrange payments themselves.

2. Release money from your assets

Your financial strategy should reflect your business’ life-cycle. If you are at a growth stage which requires higher level of funding, an asset based lending facility could meet your needs.

Asset based lending combines invoice finance with cash flow loans and funds released from other assets, such as stock, machinery and property. This means the facility can be more flexible than a traditional loan or overdraft because a company can use their assets as proof they can afford repayment.

Asset based lending is a good option for SMEs who need to fund a merger or acquisition, or who want to ensure they have contingency funds in place. We can offer you a bespoke, structured plan which helps you to manage cash flow and thrive.

3. Ensure you are prepared for bad debts

During political and economic challenges, it is not unusual for late payments and unpaid invoices to increase, which can have an impact on a trading chain. 

We understand that if your customers become unable to pay invoices you are owed, it can have a significant impact on your business. We offer 100 per cent bad debt protection on customers that have been pre-approved to ensure you will still receive payment if a company that owes you money collapses. 

Our expert credit management team will work with you to assess risks associated with both new and existing customers to minimise your exposure to bad debts, and handle the procedure should an insolvency arise.


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