Originally written by Timothy Adler on Small Business
Small businesses should speak to their banks about their debt facilities now, ahead of a possible no-deal Brexit, advises KPMG.
Banks have been putting small businesses under the microscope, figuring out which ones would be most vulnerable if Britain were to crash out of the European Union without a deal.
SME lending could be tightened up as the shock of a no-deal Brexit reverberates around the economy.
“Credit could be a little squeezed in the interim. If you haven’t had that conversation with your high-street bank, best have it now,” said Richard Bernau, director at KPMG.
Small businesses should ensure that their working capital facility remains intact should the UK suffer a disorderly exit from the EU, check the employment status of European Union nationals, and make sure their international supply chains are robust.
Although the Bank of England believes the banking sector is well prepared for a no-deal Brexit, SMEs could still find their access to credit dry up in a sudden downturn.
“Any bad or malign economic impact will have an impact on their ability to lend and the terms they are prepared to do so,” Andrew Pilgrim at EY told the Daily Telegraph.
Bernau said that banks