Since 1994, European parliaments and private banks have helped lend billions of Euros and pounds to businesses across the union including the UK, through the European Investment Fund (EIF), by enabling liquidity and finance through national banks and other money lenders. Doing this has helped the flow of creative projects, kick start innovative start-ups, and endorsed co-operation across national and international borders. The increase of growth of these small and medium-sized business has not only benefitted the employment market but has increased productivity globally.
U.K. based businesses, have benefitted companies that were previously unable to source investment, but are now able to get access to funding to set up their businesses within the UK, whilst accessing 27 other member states through frictionless trade agreements with the other EU members. Once the UK leaves the EU, there has not been a signal yet from the Government, what will substitute this vibrant lifeline for many UK businesses.
Many investors and SMEs businesses are anxiously waiting for what the ‘soft’ Brexit approach will consist of, in the hope of putting an end to the financial uncertainty and if they need to adjust their business, for instance, relocate to mainland Europe, or source cheaper suppliers, they need certainty to adjust and to plan ahead.
As SME’s have a huge impact on the UK’s tax revenue, by lowering employment levels and generating investment, particularly in the tech and science industries, if less money is available to them after this may negatively affect the whole of the UK’s economy.
However, all is not gloomy, as MP’s work hard to stop a ‘no deal’ Brexit, and with the EU stating that they want to do a deal with the UK, as well as remain close friends and neighbours, to continue allowing the free flow of goods and services between our borders. There may finally be a way through the uncertainty and give confidence to SMEs, worried that operating in a stable and collaborative environment is at an end, but more importantly, to the investors that can propel them to the next level.