The right finance: the difference between thriving and surviving in 2019

Chirag Shah - Nucleus Commercial Finance
17th December 2018
Chirag Shah Nucleus Commercial Finance
"The past year has been harsh on British business and saw many business leaders scrambling to secure stability as well as success. "

The phrase ‘The night is always darkest, just before the dawn’, is perhaps applicable to the state of affairs in the UK at the moment.

But, most importantly it inspires hope; which I believe we need more of as we enter 2019. Businesses in particular need to move on from doom and gloom and not let it distract them from delivering on their ambitions. We know that with the appropriate access to finance in place, businesses will thrive. So long as they know how to secure the funding they need.

The past year has been harsh on British business and saw many business leaders scrambling to secure stability as well as success. In particular, the fear and uncertainty surrounding Brexit has kept business owners on the edge of their seats. This lack of clarity has dampened consumer and investor confidence – a further knock for businesses. As founder of an alternative business finance provider, I regularly see first-hand the impact a lack of finance has within a business. Uncertainty over finances and a lack of financial planning can restrict the growth and development of businesses - impacting on the bottom-line for UK plc.

My personal concerns were heightened by recent research released by the Financial Intermediary and Brokers Association which reported that nearly half (46%) of SMEs are declined loans by high street banks. With the approach that banks take to lending, I wasn’t entirely surprised. But the biggest hurdle is that half of those whose application for finance was declined, chose not to look elsewhere for funding as they were unaware of the alternatives to explore. SME owners stated that a lack of accessibility, understanding and confidence in lenders they had not heard of before influenced their lack of action. Yet, every year, thousands of businesses are denied loans by established banks.

As I’ve alluded to, access to finance will be key for businesses across the UK in 2019. It is crucial that they are able to quickly access the right products and amount of finance for their needs. However, this is easier said than done as many businesses just simply don’t know or understand enough about the options available to them. Changing this, is the first step to helping educate businesses on the wide variety of alternative finance options available to them.

That said, we are beginning to see a shift, with business leaders feeling more comfortable in thinking about different options for funding their business. However, there is lots more to do, now is not the time to sit still. This is an area where the combined forces of finance providers and the experts who know and support businesses will be very powerful. Increasing knowledge and understanding amongst businesses will enable them to secure their financial position and ability to deliver growth long into the future. And, where I see that advisers can input is, by helping businesses to see the potential that finance gives their business. This means helping them to work out what they may need external lending for, and whether or not they are eligible for it. It could be that they need capital for an office move, investment to support new product launches or international expansion; or the day-to-day application of invoice finance to manage cash flow fluctuations. For businesses, access to the right type of finance can drive stability, growth, and critically, peace of mind but this is always going to be improved with access to the right advisers.

The increasingly tech-based ecosystem in which alternative finance providers exist, is evolving fast. It’s helping businesses to get smart decisions quickly, whilst making processes smoother and less time intensive for brokers and advisers. Technology is enabling our specialists to focus on understanding the intricacies of a business and what is happening behind the numbers. Therefore, with a greater depth of understanding of their business, we can find the right financial solution for them. Whether this is with a one-off straight forward product, or a multi-product facility, where we partner together for several years.

As we all know, businesses across the UK are experiencing the effects of political uncertainty. This has resulted in a significant number not sufficiently planning for the future. A poll held at our recent Brexit event found that more than half of the business leaders in the room, didn’t have a plan in place for what happens after Brexit. In addition, nearly 70% did not believe that there would be a Brexit deal by the March 29 deadline. This lack of certainty is of great concern for businesses and holding them back from having a view of how they will deliver their future success. Many business leaders lack the confidence to plan. Again, this is an opportunity for both finance providers and the network of experts who advise SMEs to provide knowledge, experience and advice. The ability to share insights and have an external view of their business is invaluable and will only help to support them and instill greater confidence in what the future holds.

We all want to see UK plc thriving throughout 2019 and both finance providers and advisers have an important role to play. By increasing awareness, knowledge and boosting confidence we will collectively help businesses across the UK realise their full potential in the coming year.


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