Brexit and asset finance – what next?
Mark Sismey-Durrant is chief executive officer at Hampshire Trust Bank
Following the result of the EU referendum, the UK along with the rest of the world has been focused on what happens next. While it remains too early to say what impact the UK leaving Europe will have, from our perspective, we have seen continued confidence from our customers as they access finance to invest in their businesses and seek opportunities for growth.
Over the coming months all eyes will be turned towards a range of key economic indicators as well as to the actions of government in order to assess and establish what Brexit really means for businesses and consumers in the UK. For instance, with the new vehicle licence plate having been launched this month, typically one of the busiest times of the year in car showrooms across the country, it will be interesting to see how sales hold up.
We are glad to report that since 23 June we have seen many smaller companies complete asset finance deals to secure funding for new cars and vans, indicating they are still identifying opportunities to grow their business. The latest Society of Motor Manufacturers & Traders (SMMT) figures have also echoed the positivity we have witnessed from our customers. Data reported this month showed British car sales increased by 3.3% in August compared to the same time last year, with the fleet sector driving demand. This is a recovery of the flat performance observed in July, shortly after Britons voted to leave the European Union. To ensure this performance continues, it is vital for the government to take the necessary steps to secure economic stability and maintain confidence for firms to continue to invest in their businesses.
With a recent study from the Enterprise Research Centre showing a quarter (25%) of all UK businesses see finance as their biggest barrier to growth, there is clearly more to be done to meet the needs of smaller firms.
As a result of this funding gap we are witnessing a diversification within the challenger bank space, including an emergence of institutions that specialise in a particular sector or are focused on a specific audience group. These banks offer a more specialist proposition to smaller businesses and employ experts to help solve niche problems that firms couldn’t necessarily solve with another finance provider.
Specialist challenger banks, such as Hampshire Trust Bank, offer a personalised service and approach. In addition to this personalised service and expertise, specialist challenger banks can offer bespoke financial solutions for SMEs.
The long-term outlook of post-Brexit Britain continues to remain unclear and will remain as such until we receive more up-to-date economic indicators. While the country waits clarity, Hampshire Trust Bank continues to meet the demands of its customers, offering vital support to smaller businesses, the often overlooked lifeline of the UK economy.