08 Jan 2020 | 10.13 am
SMEs Should Act Urgently On Brexit
Brexit checklist from Banking Federation
08 Jan 2020 | 10.13 am
Banking organisation BPFI has warned that while 85% of SMEs could be hit by Brexit, many have made no preparations to mitigate the effects of Britain leaving the EU.
The Banking and Payments Federation Ireland has warned that firms need to take urgent action in several areas, including custom guarantees, currency volatility, cashflow management and credit supply.
The BPFI said measures should include “engaging with their bank to ensure that they can arrange for any funding or guarantees needed to help avoid undue disruption to business”.
Head of funding Marian McCarville said: “The reality of Brexit as it now approaches is that there will be implications for a huge number of SMEs. It is concerning that not all businesses are as prepared as they could be.
“The recent DBEI survey shows half of SMEs identify that they could be impacted by the need for customs declaration, yet only 10% have taken action on this. Also, while 14% of SMEs say that hedging currency and investment issues could impact them, only 3% have taken action at this point. So too, for liquidity/currency issues, where 26% believe they could be impacted but only 4% have taken action.”
McCarville was referring to a survey by the Department of Business, Enterprise and Innovation that shows that three in four small and medium firms will experience some or a high impact from an ‘orderly Brexit’, rising to 85% in the event of a ‘no deal Brexit’.
The federation has published a finance checklist for SMEs that outlines key advice on financial and banking preparedness ahead of the UK’s expected exit from the EU. It provides information on a range of areas including custom guarantees, currency volatility, cashflow management and credit supply.
McCarville added: “It is essential that SMEs are proactive in assessing the impacts for their business, planning what actions need to be taken to mitigate the risks and capitalise on opportunities, and making sure their business model is adapted as needed to meet their own particular circumstances.
“The objective of the information we are publishing today is to provide a quick finance checklist which we hope will prompt SMEs to review some of the more common Brexit-related financing requirements.”
The checklist, Brexit, Business and Banking, is available from the BPFI here. It covers areas such as imports/exports, with customer declarations at the centre, sterling/euro volatility, and managing cashflow and liquidity.