Post EU Referendum business on hold?

ID-100394296.jpg

Image courtesy of alex_ugalek at FreeDigitalPhotos.net

While it is true that businesses abhor uncertainty and tend to become more cautious about investment in growth when they cannot see the economic way ahead, it is also true that for most businesses doing nothing is not an option for survival.

So, given that it is expected to be at least two years before there is clarity about the UK’s proposals and any agreements in the aftermath of the EU Referendum vote to leave, what should businesses be doing?

Despite the monthly economic indicators, such as the Markit/PMI suggesting plummeting confidence and a contraction in manufacturing, the situation is not all doom and gloom.

As in any upheaval there will be both winners and losers, but those that opt for at least some moderate continuation of their plans for growth could arguably do better than those who suspend all investment activity.

While the referendum decision has increased costs for those buying in $US or Euros at the same time it has left exporters in a more competitive position due to the drop in the value of £Sterling.

But is finance still available for those who may have been planning to upgrade equipment or expand in other ways?

The short answer is yes.

There are lending facilities in place from asset finance suppliers and the Challenger banks have also signalled that they will continue to lend.

For those businesses that were planning to invest in growth, it might be better to go ahead than to wait, on the grounds that interest rates have not yet moved upwards so a fixed rate package may be more affordable now than later.

Finally, a good move for UK exporters of goods and services would be to communicate with their customers in Europe and elsewhere to reassure them that they are still valued as customers and there will be no change to providing whatever is required.  In some cases it may even be possible to offer more favourable prices to overseas customers.