Brexit to impact funding for start-ups and small businesses

Over one-in-three small businesses expect access to funding to become more difficult post-Brexit, according to research from the British Business Bank.

By Thomas Mackie

29 % of small businesses and start-ups are concerned about Brexit and are delaying expansion decisions and reducing their demand for external finance.

Bruce Walker co-founder of FutureX, who host international business summits and deliver development programmes across the globe, said: “From what we can see no major deals will be done until we know what is happening with Brexit.

“Everyone is holding off because lots of companies who receive European funding now have been told that either a no-deal Brexit contingency plan will be implemented or we just don't know what the relationship is going to be like with Europe, so there has been a major stagnation in people committing to things.”

Despite concerns, 50% of small businesses still aim to grow within the next year. Image courtesy of pxhere.com

Fewer small businesses have been using external finance since the 2016 EU referendum, with only 36% of start-ups using funding from outside their company in 2018, as opposed to 44% in 2012.

This has resulted in 29% of small businesses to expect Brexit to have a negative impact, with only 3% expecting access to funding to become easier.

Stuart Thomson, Head of Public Affairs at BDB Pitmans, said: "Without certainty of what the post-Brexit environment might look like, finance will be lacking and that will hold back growth.”

However, despite these concerns over half (50.4%) of small businesses still aspire to grow over the next 12 months.

Mark Brownridge Director General at EISA said: “It’s going to be small businesses that give us the growth over the next couple of years while the bigger businesses decide what to do, how to do it and make their decisions.”

Are you concerned about how Brexit may impact your business? If so, then take a look at how four experts see it.