Q4 2017: The challenges ahead for UK SMEs - Image

Q4 2017: The challenges ahead for UK SMEs

From Brexit uncertainty to cyber threats, from new investment schemes to talent platforms, what are the trials ahead for UK SMEs and the support available for up-and-coming companies through 2017’s final quarter?

What are the challenges facing SMEs in Q4 2017?

Every new fiscal quarter brings its fair share of trials for start-ups and long-running UK businesses alike, particularly those small- and medium-sized enterprises (SMEs) which are still in the process of obtaining initial working capital, developing productive relationships with their first batch of customers and, most importantly, securing themselves the most favourable end-of-annum bottom line. That said, the fourth and final quarter of 2017 looks set to present an especially gruelling array of hurdles for UK SMEs to overcome, with financial trends emerging in numerous industries likely to pose substantial difficulties to those caught unaware.

Any of Touch Financial’s clients who have been following our recent blog content will no doubt recall late payments being one of the contentious issues plaguing countless up-and-coming firms at present. As we reported earlier this month, 45% of the SMEs quizzed by insurers Zurich in August stated that they’d been forced to wait as much as three months for payment from their clients, with a further 14% claiming their patience was tested for between 4-6 months until the funds they were owed arrived in their accounts. Indeed, the UK government has estimated that 50,000 business closures could be avoided if payments were made more promptly than is currently the case.

If the prospect of receiving funds owed months after their due date wasn’t concerning enough for SMEs struggling to generate working capital, then equally worrisome for many smaller firms right now is the ambiguity surrounding ongoing Brexit negotiations and their potential impact upon exports. City A.M. reported in August how payments group World First’s Global Trade Barometer indicated 32% of SMEs expected no annual growth for their business as of Q2 this year due to Brexit uncertainty, while 23% expected growth of less than 5%. The more SMEs become concerned about the trajectory of Brexit discussions, the more reluctance they’ll potentially feel towards exporting products to other nations; but having said that, an August survey by ECI Partners showed 70% of UK firms as still being open to selling overseas.

Another area in which the UK’s oncoming departure from the European Union seems to have caused problems of late involves the funding provided to venture capitalists and SMEs operating here. Politico has found that more and more domestic firms are losing the support they once received from the European Investment Fund, an agency of the EU which provided €2.3bn of support to local companies between 2011 and 2015. British venture capitalist Fred Destin told the site that this withdrawal of funding “puts the UK at a structural disadvantage compared to other European countries”, with Politico’s Mark Scott adding that the move “raises concerns” for the UK as other nations “court startups and entrepreneurs into leaving London and other British cities”.

The UK food industry has shown particular concerns about how fledgling businesses will thrive in the next quarter and beyond March 2019. A survey cited by The Guardian last month described how almost one-third of British food and drink businesses had lost EU employees in the last 12 months, a noteworthy figure given that just under 20% of the EU nationals working here are employed by farming, food processing, retail or catering businesses. This doesn’t appear to be an issue likely to subside anytime soon either, with nearly half of the 600 businesses surveyed on this occasion fearing more such resignations were inevitable come the final quarter of this year.

Similarly hesitant about the future of the UK economy at present appear to be the country’s banks; as detailed by Touch Financial in our recent blog on the implications in the freefalling value of GBP, SMEs may soon find themselves wanting for local banking facilities, with a record-breaking 762 branches projected by Reuters to close between now and December 31st. The implications of such a historic number of shutdowns are plain to see for those firms still establishing themselves in their respective industries, particularly given how local bank staff can often provide financial guidance based on far greater knowledge of their region and what steps successful businesses in their area have taken in order to thrive.

Whereas many of these issues might seem out of the control of SMEs – though as we shall explore later, there are proven solutions which Touch Financial can provide in order to help businesses secure their finances this quarter – that’s not the case in terms of cybersecurity, an area where businesses can take instant action in order to prepare themselves for the months ahead. According to business community analysts Databarracks, 41% of UK firms have not invested in any cybersecurity safeguards in the past year, 66% have neglected to provide cyber awareness training and 89% have yet to gain certification from a cybersecurity framework. Considering that under new General Data Protection Regulation (GDPR) – more details on which can be found in our dedicated July blog – organisations can expect fines of up to £17m should they fail to protect themselves from hacking, this seems a clear area in which SMEs and larger businesses alike can stand to gain from investment in Q4.

Financial support available to bolster SMEs through the hard times

Here at Touch Financial, we pride ourselves on offering support to SMEs and large-scale business operations alike, from their toughest days to their greatest moments of triumph. Through an invoice finance facility, whatever the current state of your business going into Q4 and the New Year, you can access a pre-agreed percentage of your invoices almost instantly, allowing your firm to generate working capital within moments of raising its invoices, or even grow its operations to ensure the strongest bottom line possible come the end of the fiscal year. A solution of this calibre offers ideal security for any SMEs looking to secure their finances in these uncertain times, preparing you for the final quarter of 2017 without the worries of late payments holding your business back.

Contact our expert team of consultants today and find out how we can select the lender best suited to your business’ scope and aspirations for Q4 2017 and beyond.

Apply now and one of our consultants will help to find you the best invoice finance facility for your business, free of charge.

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