Eurozone crisis is turning SME businesses off overseas opportunities
Fears over the uncertainty and instability in the eurozone are preventing small and medium sized businesses in the UK from exploring the potential of trading internationally, says the UK’s leading independent invoice finance specialist Bibby Financial Services (BFS).
A study of 1,000 UK small and medium-sized businesses commissioned by BFS reveals almost one in five (17 per cent) firms said they were too concerned about the instability of European markets to even think about doing business internationally. It is this negative outlook that is stopping them widening their horizons and targeting new business opportunities around the globe.
And worryingly, a third (29%) of firms cited the eurozone crisis, with the resulting market instability and impact on exports, as having the biggest negative impact on the day-to-day performance of their business.
While 38 per cent said that it was financial and cultural barriers as well as costs and export regulations which were preventing them from trading in foreign markets, 18 per cent of respondents said they had never considered exporting at all.
UK trade figures show that there is still a net import from Europe, with the gap between imports and exports growing 86 per cent in the past year. The UK’s EU exports decreased to £11.4 billion in April, a drop of over 20 per cent from March – unusually high for the seasonal export dip between March and April.
David Postings, UK chief executive of Bibby Financial Services, says: “Trade to EU member states is clearly being affected by the European debt crisis, but to find that this issue is preventing businesses from any involvement in overseas trade is a huge concern.
“Identifying opportunities for growth in new markets is vital to the longevity of any business and it is important that the effect of current turmoil in Europe on the day-to-day performance of UK firms is kept to a minimum.
“Equally, business owners and managers shouldn’t overlook a pool of potential international customers because of fears associated with the financial, cultural or legal implications, as there is help and support available to overcome such barriers. Independent specialist finance providers, such as Bibby Financial Services, support SMEs involved in international trade by providing tailored funding facilities and support that best matches the specific needs of the business.
David adds: “We know from our existing client base of 4,000 UK businesses, that with the appropriate funding support in place and access to experts for advice and guidance, firms can reap the rewards that entering new markets present to increase their order books and enjoy greater opportunity for business growth.
“Businesses need to be aware that there is help out there to overcome the challenges associated with trading internationally and that despite economic stagnation in the EU, there is still a strong demand for quality products from all over the globe.”
The survey for Bibby Financial Services reveals that it is London-based businesses that are feeling most pressured by the problems in Europe, with 38 per cent of companies in the capital struggling as a result.
In Scotland, by contrast, the situation in Europe seems to be having less of an impact. Only 17 per cent of Scottish firms cited the eurozone crisis as a major challenge to their current stability.