October 23, 2019
LENDERS battling for the custom of Brexit-wary SMEs are offering some amazingly competitive deals, a leading financial broker has said.
Karina Gallagher says there has been a huge shift in the landscape in recent weeks, with lenders aggressively pricing funding to win business.
It comes against the backdrop of many businesses holding back on accessing funding to invest in assets as they await the outcome of Brexit.
But now may be the best time to act, says Karina, especially for companies operating in sectors where vehicles are a core part of the operation.
“For strong businesses, I am seeing some extremely attractive rates as the lenders compete for these deals” said Karina, the managing director of Cumbria-based Hornby Commercial.
“Lending at the moment, particularly in the transport sector is incredibly cheap, so for a business looking to buy, say a coach, a HGV or something similar, now is a very good time to take action.”
SME borrowing reached a two year high in June, increasing by £375m, a growth rate of 0.8 per cent, figures from the Bank of England revealed. Borrowing by firms increased overall by £2.5bn in June and during the first half of 2019, borrowing was stronger than the same period in 2018.
But Karina, who has more than 30 years of experience in the banking sector, says there has been a marked slowdown in SME lending in the last quarter, attributing much of it to a lack of certainty over the UK’s exit from the European Union.
And she says a lack of confidence is leading a majority of businesses to postpone the implementation of growth or investment plans.
But that, she believes, presents an opportunity for the bold to capitalise by investing while their peers and competitors do not.
“It is understandable that many businesses have Brexit-induced jitters,” she said. “But what that means is there is a real chance here for those companies who have the courage of their convictions to really thrive.
“Putting investment off until such a time that everyone decides the climate is right only means you follow the pack.
“Any decision to invest must, of course, be backed by a sound financial plan and projections. And if it is not right for the business for any reason, I see a part of my job as communicating that.
“But with rates this low, if the time is right, it is right regardless of the hand played by the Prime Minister in Europe.”
Business owners are also being encouraged to consider that the Government’s Annual Investment Allowance (AIA) is currently under a temporary uplift to £1M until 31 Dec 2020.
This means that there can be significant additional tax benefits of investment during this period that will not be available when the AIA limit reverts to its usual £200k on 1st January 2021.
“We always encourage discussing any investment plans with your accountant to make sure you have considered all the benefits and risks ahead of any purchase,” said Karina.
Hornby Commercial is an independent financial brokerage with access to a wide range of lenders and funds.
If you would like to speak to Karina about business lending, call 01229 588077 or email finance@jfhornby.co.uk


August 13, 2019

BUSINESSES across Cumbria should not have to curtail growth or expansion this year because of continued economic uncertainty, one of the region’s leading business voices has said.

Some firms in the county may be putting expansion and equipment purchases on hold amid concerns of a future downturn post-Brexit.

But Karina Gallagher, managing director of Hornby Commercial, in Ulverston, said this meant companies were missing out on opportunities which could actually increase their profitability in the longer term.

The former banker has now released advice for business owners across the region who remain unsure about whether they should press ahead with their plans in the coming months.

“Some businesses are concerned about retaining their cash flow because of the uncertain climate we are in at the moment,” Karina added.

“This is certainly understandable and I’d always recommend budgeting for the cash a company is going to need in the year ahead.

“But keeping hold of cash can often result in the postponement of moves which could strengthen a firm’s overall position by helping to bring in profit later on.

“For these businesses, there are plenty of options. They can use an appropriate form of low-cost finance to keep cash where it’s needed while still being able to go ahead with planned projects.”

The advice from Hornby Commercial was released following the findings of the most recent quarterly survey from the British Chambers of Commerce.

The organisation found cash flow continues to be a concern for businesses in the manufacturing and service sectors, as it warned market uncertainty is stalling economic growth nationwide.

Karina, who secured more than £6 million of finance for businesses throughout the area last year, added: “Many businesses are hesitant at the moment so they are also opting to use finance to spread things like tax payments and larger asset purchases out over a number of months while keeping their cash in the bank.

“There are lots of options available which will make sure firms are on a sure footing for the months ahead without missing out on essential opportunities to grow.”