Delayed Brexit: Confidence Crunch? Yes. Credit Crunch? No.
These are curious, some would say crazy, times. Politically, the UK hasn’t been as volatile as it is now for generations.
Whatever your views, ardent Brexiteer or committed Remainer, we can all agree that recent events in Parliament are unlikely to be witnessed again in our lifetime.
And yet despite this, the UK economy is on a firm footing. The latest jobs data, published in mid-April, showed unemployment numbers dipped by a further 27,000 in the three months to February (to 1.34 million), while the number of people in a job jumped by an impressive 179,0000 to 32.7m — a record high.
Equally, GDP rose by a surprise 0.2% in February, according to the latest data from the Office for National Statistics. As for interest rates, with ongoing Brexit-related uncertainty, the outright consensus is that they won’t be moving anywhere for at least a year, which affords consumers and businesses real peace of mind.
Add in the fact that inflation remains below target and wage growth is improving by the day, and the picture economically is anything but bleak. In fact, it’s positively resilient. There’s another major positive for the economy, too: the availability of non-bank finance for UK businesses seeking growth finance is stronger than ever.
While there’s without doubt a confidence crunch in 2019, as some businesses sit tight, there’s certainly not a credit crunch as there was back in 2008/09. In fact, it’s the absence of a credit crunch that could keep the UK economy on a steady footing as the Brexit drama plays out.
The fact that the most aggressive lenders in the SME finance market at present are some of the world’s biggest institutional investors, typically pension and asset management funds, creates further peace of mind. These institutions invest for the long-term and have the financial strength to ride out short and even medium-term volatility.
We’re especially excited by the unsecured loans that are being provided by major institutional investors and, through them, have an SME war chest of our own of no less than £0.5bn. A quick snapshot of the typical loan terms can be seen below.
- No Security– no Warrants, Personal Guarantees or Debentures
- Leverageup to 4x (Net Debt/EBITDA)
- Fixed Rate –as low as 6%
- Loans – from £500k to £5m
- Repayment Profile – up to 8years
- Simple Process– no legal or third party financial due diligence
- Fast Turnaround – 30 days*
- Arrangement Fee – flat £20,000 per transaction
To date, CODE has provided around £60m of growth debt funding to SMEs and we have many hundreds of millions more ready to get out into the market, despite ongoing Brexit chaos.
To find out if your business is eligible, fill in your details here and we’ll contact you with the full borrower criteria and advise you on how to apply.
Banks may be reluctant to lend to SMEs until the “Brexit fog” has cleared, but that’s not stopping business lending from alternative sources.
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CODE Investing attended the Castle Water annual customer conference in Westminster.