Fortunately the last financial crisis created a number of alternative funding solutions for small businesses, which is just as well now that European funding is in a state of flux following the Referendum.
The Bank of England says it has £150bn ready to help. History and post Brexit announcements tell us that this money will be used to help the banks. History also tells us that past schemes from the Bank of England and the Government, intended to support the economy, have provided little that flows through to SMEs.
A surprising number of commentators have mentioned help for SMEs by extolling the virtues of the Funding for Lending scheme established by the Bank of England and the Business Growth Fund, set up by five major banks. In fact, the former seems to have gone mostly to support the housing market while the latter concentrates on growth equity investments in excess of £2m.
For some European funded schemes it is still ‘business as usual’, in fact we have seen evidence that some schemes are being accelerated prior to Article 50 being triggered, but for some – especially those still at the application stage – everything is on hold.
National Government withdrew most of the funding schemes that supported businesses in the Regions via the Regional Growth Fund last year and the message was transmitted clearly to all that Devolution was the answer.
But Devolution takes time. Where will the local funds come from and when? Local Authorities, Local Enterprise Partnerships (LEPs), Combined Authorities and Midlands Engine are the runners and riders in our area at the moment. They are all being told to support local businesses with their choice of priorities. But you need funds before you are able to make choices. European funding ironically was used or planned to be used by all.
So where does that leave small businesses? More than ever, they are going to have to do their research to make sure they are aware of all the options for funding that are open to them and look for new sources if old ones have dried up. As one door closes, another one opens. I suspect that not too many of them will be putting their plans for growth on hold and many will find new opportunities and sources of finance in the current situation.