With the Brexit deadline fast approaching, companies are scrambling with contingency plans for the future of their businesses.
With the Brexit deadline fast approaching, companies are scrambling with contingency plans for the future of their businesses. The government published its 110-page EU Withdrawal Agreement Bill on Monday with hopes to pass the deal through the Commons and avoid a Brexit extension past the October 31 deadline. With rising uncertainty over UK’s future, how are small business keeping up? According to recent statistics, SMEs are continuing to rise above the challenge.
Small and medium businesses are thriving despite mass political uncertainty clouding Britain in recent years. Billions of pounds have been raised across various schemes for SMEs including new investments and company growth, showing just how lucrative the sector really is.
In the first half of 2019, the UK was named as the European leader in both private equity and venture capital investment - a key source of finance for growing SMEs. Meanwhile, the Enterprise Investment Scheme, set up between 2017 to 2018, has raised a whopping £1.9 billion.
In addition, new innovations in science and technology are expected to create millions of jobs in the UK after Brexit. According to a report from BNP Paribas and the Centre for Economics and Business Research (CEBR), meanwhile, technology start-ups have received a record £5.5 billion on foreign investment in the first seven months of 2019.
In 2018, the British Business Bank reported small firms raising a record £6.7bn in equity funding.
And earlier in June this year, it was revealed that the UK is home to more tech unicorns than anywhere else in Europe, positioned just behind the US and China. With all the positive reports, it is clear that investors are now turning to UK SMEs for investment opportunities despite rising Brexit uncertainty.
"One of the things we have noticed when talking to our investor base is that there is more demand than ever for investment opportunities in the UK's wealth of high-growth small businesses,” Luke Davis, CEO of IW Capital, said. “Brexit will undoubtedly make some things more difficult, but it will also open up opportunities. As some of the most adaptable and nimble businesses out there, SMEs are in the best position to take advantage of this.”
The UK continues to embody a sense of innovation and “entrepreneurial spirit” even when faced with rising challenges and the possibilty of a negative economic outlook, Mr Davis said.
“The statistics show that this is not solely anecdotal or confined to a small group of investors and entrepreneurs. Innovation and entrepreneurial spirit are two things that the UK truly leads the world in, supporting this ambition is of the utmost importance," Mr Davies added.
However, some critics believe more can be done to help SMEs thrive by creating more job and growth opportunities with added government support.
"Small firms in the UK have navigated the past three years worth of political uncertainty with remarkable resilience and optimism,” Jenny Tooth, CEO of the UK Business Angels Association said. But more can be done to ensure that this ambition creates the jobs and growth that are so vital to the UK economy. Whether this comes from increased Government support or from private investors, it is hugely important to provide the funds to help SMEs grow.”
Ms Tooth recommended enabling “angel investors” to not only grant funds, but to help provide advice and guidance to SMEs who plan to take their business ventures overseas.
“One source of funds that are ideally placed for this task is angel investors, who not only offer finance but also the expertise and experience to help entrepreneurs to seize opportunities and start life outside of the UK in a positive fashion."SMEs remain the backbone of Britain’s economy. With continued investments and long-standing support for the sector, there is no doubt small and medium businesses will continue to thrive and move forward in changing times.