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Bank Lending

Bank share prices to drop in the event of a Brexit, will this stop SME lending?

By CreditMan Friday, June 17, 2016

Aamar Aslam, CEO of Funding Invoice, the invoice trading platform, comments on the potential impact of Brexit for SMEs:

“The uncertainty over Britain’s position in the EU is already having a knock-on effect for the country’s start-ups and small businesses. Many are unsure of how to forecast the next two years of business, and even beyond that timeframe, depending on how difficult it becomes to trade with the European Union if a Brexit goes ahead.

It would be particularly difficult for British start-ups and SMEs to export their products and services outside of the UK, as they would need to look even further than Europe for business opportunities – which would inevitably come at a cost. With uncertainty over how the pound will fare against other world currencies, our small businesses could find themselves unable to reach their growth targets without additional financial support.

Whilst banks such as HSBC have publicly committed to large investments in SME lending, if a Brexit were to happen there is a possibility that this lending could be tightened as banks’ capital comes under scrutiny in the coming months. SMEs should explore all possible avenues and look to more alternative routes of funding to help their business stay on track. Fintech firms can offer better rates for small business than the traditional banks, with recent studies demonstrating higher levels of customer satisfaction in addition.”