Small business owners concerned about how the turbulence of Brexit will affect their finances might be relieved to know that many of the country’s main banks have signed up for the government’s SME Finance Charter.
This is a commitment from banks stating that they will help their small and medium sized business customers by providing financial support throughout the Brexit process. So far a number of banks have already pledged their support: Lloyds, HSBC, NatWest, Barclays and Santander all signed up to the charter towards the end of 2019, offering some protection to the large number of small businesses that bank with them.
The charter is made up of five pledges:
1. We’re open for business and ready to lend.
2. We’ll help you prepare for Brexit and beyond.
3. We’ll support your application and signpost other options if needed.
4. We’ll treat you fairly at all times.
5. We’ll work with the government-owned British Business Bank to support SMEs.
In practice, this means that your bank should be prepared to give you plenty of support and guidance if you find that you need to take out more financing to get you through the coming months and years. They should offer up information about the particular kinds of financial application that they’re able to support, and also provide additional resources to ensure that you’re fully informed.
In general, the pledge covers five specific kinds of financial product: overdrafts, loans, asset finance, stock lending and invoice financing.
The banks’ commitment also includes reference to the British Business Bank, a government owned development bank designed to help smaller businesses looking for growth. They provide a range of different investment offers including angel investment, corporate venture capital and equity crowdfunding.
They also give you access to a wealth of information that can help you to get a fuller understanding of the different finance options available before going ahead. The charter means that your bank will direct you to the British Business Bank if they feel that it would be the right option for your needs. They may also give you extra information about the schemes that are available.
It’s still very early days for the Brexit process, and we’re yet to see what the impact on small businesses may be. However, if you have any concerns about securing outside finance, then ensuring that you bank with somebody signed up to the charter is probably a good idea.
It’s probably worth noting none of the modern app-based business banks have signed up to the charter yet. While these types of bank typically offer innovative and flexible accounts, they don’t tend to offer the full range of financial products that you’ll find at more traditional banks. If you’re looking for a bank that can lend you money and help you weather the storm of Brexit, then one of the larger banks may be right for you. You could always open up a second, more modern account if you also need access to some of the jazzier app features.