23/04/2019.

Government pledges post-Brexit fund for SMEs.

The government has pledged to provide an additional £200m in funding to the British Business Bank in order to mitigate damage from Britain’s withdrawal from the EU to investment in small UK businesses. Treasury secretary Robert Jenrick says the government “want[s] to do more to ensure our small businesses and entrepreneurs can thrive” after Brexit, with the UK’s loss of access to the European Investment Fund set to impact SMEs’ access to investment capital for growth.

Investment at eight year low

Economic uncertainty around Brexit has already had a significant impact on UK business according to analysts, who note that smaller businesses are particularly vulnerable to damage because of their reliance on investment for growth and an inability to absorb unexpected losses. In the last quarter of 2018, business investment in the UK fell by 0.9% – marking the first time that investment has declined in the UK across four consecutive quarters since the global financial crisis in 2009.

According to the British Chambers of Commerce (BCC), Brexit-related uncertainty has contributed to waning investor confidence, with investment in operations across UK businesses now at an eight year low. The group’s survey of 7,000 British businesses underlines that economic growth “nearly ground to a halt” in the first quarter of 2019. BCC Director General Adam Marshall says that the group’s findings “should serve as a clear warning that the ongoing [Brexit] impasse is contributing to a sharp slowdown in the real economy.”

35% of SMEs delay growth amid uncertainty

Amid this ongoing uncertainty and a lack of guidance from regulators regarding Brexit, the data suggests that small businesses are struggling to cope. Over a third of SME owners (35%) have delayed plans to grow and invest in their businesses, with many saying that uncertainty has made it difficult to plan ahead. Meanwhile, 19% of small businesses report being on the brink of collapse due to Brexit, whilst 8% of SMEs say they have made workers redundant in a bid to prepare for unknown costs expected to arise from the UK’s withdrawal from the EU.