What small firms really think about Brexit

UK small businesses that trade with the EU are not confident about their prospects after Brexit according to the initial findings of a significant new research study by the Federation of Small Businesses.

The FSB has conducted a six-month research programme on the business impact of leaving the EU. The findings, it says, underline "the importance of the pledge to secure the greatest possible access to the EU single market".

According to the FSB, one in three (32%) small businesses are involved in overseas trade as an exporter and/or importer, with the vast majority trading with the EU single market (92% of exporting small firms and 85% of importing small firms).

As a result of Brexit, 29% of exporting small firms, regardless of destination, expect their level of exports to decline, while one in five (20%) expect it to increase. The difference is starker for current importers, where 31% expect to see a decrease compared to just 7% that expect to see an increase.

"Small business exports have been on the rise since the referendum with the lower value of the pound making UK goods and services more competitive," said Mike Cherry, FSB national chairman.

"As the UK leaves the single market any new agreement must maintain the current ease of trade with the EU and not lead to additional administrative or financial burdens. For a truly global Britain, we need the Government to enhance specific support for small exporters to reach new customers and to negotiate ambitious UK-specific trade deals with large and emerging markets."

The FSB’s Brexit research series is to be published over the coming months. It will include in-depth reports on what small businesses want from Brexit, focusing on: access to markets and trade; skills and labour; EU funding and business support; and the future of regulation.

Also this week, new data from Close Brothers indicates that many UK SMEs have put their long-term planning on hold because of the lack of clarity about what Brexit will look like. Its latest Business Barometer has found that 11% of SMEs have put financing and growth plans on hold, 8% have stalled their investment plans and 7% have changed their hiring plans.

However, Close Brothers also reveals that it is the larger SMEs (with 100-249 employees) that are most likely to change their funding plans – 22% of these firms say they won’t borrow money until the terms of Brexit are clear, while just 6% of micro-SMEs say the same.

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