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Brexit and how small businesses can meet the transition costs

This is probably the last thing many small business owners want to hear as they struggle to deal with the impact of Covid-19, but Brexit is happening soon. The call for government help to manage the costs of transition is growing as small firms question how they can afford the switchover.

The coronavirus pandemic has knocked the small business sector for six but the market is very slowly beginning to reopen. However, there is little time for company owners to collect their thoughts and catch their breath because, in just a few months’ time, the UK will officially no longer be part of the European Union.

Small businesses and the changing face of Brexit

For many small businesses, the end of transition period brings with it the prospect of yet more market headwinds. While the timing of the switchover is hardly breaking news, a lot has changed for small businesses over the last six months.

Today’s economy looks very different to the one in which firms were operating at the beginning of the year. Small businesses aren’t in the same position, either to take opportunities or to bear the brunt of another period of economic torpor.

Furthermore, the state of UK government negotiations with EU leaders over Brexit suggest that a no-deal exit may be on the cards again, the impact of which most business owners probably don’t care to give too much thought to.

No deal, state aid and how to afford the impact of Brexit

In the wake of the pandemic, its impact on the economy and the growing prospect of a no-deal Brexit, it comes as no surprise to see the business sector calling for financial help from the government to manage the costs of the transition.

The Federation of Small Businesses has led a plea for transition vouchers that can be spent on tech, expertise and training as a way to help firms deal with the challenges that Brexit presents, whether a deal is agreed or not. There has also been a call for the government to extend tax-free shopping to EU member states after the transition period.

It seems clear that small businesses are becoming increasingly concerned about the impact of Brexit on trade, cash flow and their capacity to invest and grow. So, how can these firms keep their finances on an even keel and maintain forward momentum?

Alternative finance can help.

How alternative finance can help with transition costs

As small business owners manage their finances in the coming months, it is imperative that they are aware of all the funding options available to them, from the government emergency loan schemes to the services offered by alternative lenders.

In the wake of prolonged caution from traditional lenders, alternative finance facilities such as invoice finance, asset finance, peer-to-peer lending and crowdfunding are proving a vital source of capital for small businesses, both for safeguarding cashflow and for essential investment. These facilities, which offer a more personalised approach to lending, are helping small businesses survive and grow.

What business owners should know about funding options

Whether small businesses are ready or not, Brexit is coming and owners have to be prepared for the impact it has on the trade, markets and consumer spending. Given that the damage being done to the sector by the coronavirus pandemic, some form of government aid seems inevitable, but all the same, it remains vital that owners know about all the funding options out there, including alternative finance.

To find out more about A&T Business Associates services, contact Steve Bowles on 01903 602211 or steve.bowles@atbusinessassociates.co.uk.

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