Could a no-deal Brexit cause SMEs to break the law?
It’s fair to say that most people are worried about the impacts of a no-deal Brexit. There is a constant sense of uncertainty and not a lot of great news. To add to our concerns, a recent poll conducted by UK finance company, Premium Credit, found that a no-deal Brexit could create a surge in businesses without insurance.
With Employer’s Liability insurance being a legal requirement for businesses with employees, this is extremely concerning news.
47% of UK SMEs predict they’ll struggle to manage cash flow
According to Premium Credit’s poll, 47% of UK SMEs believe Brexit will have a ‘very significant’ impact on their ability to manage their cash flow and pay for business insurance. Not being able to afford insurance leaves businesses extremely vulnerable. So, it’s a good idea to start preparing for any challenges like this now.
Adam Morghem, strategy and marketing director at Premium Credit,said: “We lend around £3 billion a year to help UK businesses spread the cost of their insurance. Our research reveals that 61% of SMEs claim to use credit cards, loans and premium finance to pay for their insurance, but this could increase dramatically if their cash flow is damaged as a result of a no deal Brexit.”
Why a no-deal Brexit could cause SMEs to struggle to afford insurance
Most SMEs rely on goods to be able to run their business. With a no-deal Brexit, due to strains on trading rates, the goods you buy could become more expensive. This means you may have to spend more on stockpiling, to be more economical.
This would create another cost in itself, as you’d need to pay to store all that stock. “All of this could make it harder to pay for the essentials needed to run their operations – from paying staff salaries, rent, and insurance.” says Adam Morghem.
It’s important to note that we don’t know the outcome of Brexit yet, but we should ensure our businesses are prepared for any challenges.