Brexit Not Knocking Global SMEs’ Confidence, Survey Finds

The year is expected to be a strong one for U.K. SMEs despite political and economic uncertainty in the midst of Brexit. New analysis from BDRC Continental released this week said small businesses that go global will be especially poised for growth.

“The early months of 2017 have seen something of a change amongst this group, with lower levels of concern, and they remain more likely to be planning to grow,” summarized BDRC Continental director Shiona Davies in a statement. “Future appetite for finance does, though, remain lower than previously seen.”

According to the data, more than a third of SMEs surveyed in the first quarter of 2017 reported growth over the past year, and nearly half said they were planning to grow. The businesses with a global view, though, are even more likely to see success, researchers found, with 52 percent of exporting SMEs planning to grow — up from 41 percent in Q4 2016. The figure is even higher — 67 percent — for businesses that both import and export.

Even with Brexit, BDRC Continental found little change in levels of concern among international SMEs with regards to the economy and political uncertainty — while both of these topics were concerning to global SMEs in the last quarter of 2016, researchers said that concern has not been carried over into the new year.

“Whilst for most SMEs, especially those who do not trade internationally, it appears to have been ‘business as usual,’ we did see increasing concern among international SMEs towards the end of 2016,” Davies noted. As that concern wanes, however, it may be a good time for smaller companies to continue their international endeavors.

International growth doesn’t come without it’s risks, though, especially for U.K. SMEs. And while Brexit may not appear to be boosting the concerns of small businesses that operate globally so far this year, the financial services industry is warning these companies to stay vigilant.

BDRC Continental’s research surfaces as separate analysis from PayStream Advisors and Tipalti, announced earlier this month, found that most businesses are conducting trade internationally, with the majority of companies surveyed reporting that more than 2 percent of their payments are made to suppliers in other countries.

But there is a significantly higher risk to companies conducting business across borders. According to PayStream and Tipalti, the error rate is higher as the volume of cross-border payments increases — a finding that may stifle international SMEs’ plans for growth if they don’t have the technology in place to manage the challenges.

“Managing global supplier payments is a time-consuming, risk-prone and arduous task,” warned PayStream Advisors Research Associate Anna Barnett in a statement. “CFOs can streamline the global payments process by instituting modern accounts payable systems, like a global ePayments platform. These systems provide corporations with the necessary toolkit to manage their complex cross-border payment operations.”

BDRC Continental’s data also emerged as cross-border payments company Money Mover issued a warning to SMEs to mitigate the risk FX fluctuation in the wake of ongoing Brexit procedures. According to the company, an SME that makes 12 payments a year of about $62,000 each could be paying about $22,000 in fees if they don’t lock in FX rates.

“Britain’s small businesses are facing unprecedented levels of uncertainty in light of the U.K.’s vote to leave the European Union,” said Money Mover CEO Hamish Anderson in a statement. “Many small British businesses make invoice payments, pay salaries and manage their treasury accounts overseas.”

And, like PayStream Advisors and Tipalti noted, Money Mover is suggesting that SMEs obtain the appropriate FinTech to mitigate the challenges and risks associated with global growth.