International CEO, Steve Box, discusses Bibby Financial Services’ new funding agreements which will see us boost our funding for SMEs throughout Europe.
To say the last few weeks has been an interesting period in European politics would perhaps be an understatement. As a new British Prime Minister looks to build a Government to negotiate the UK’s exit from the European Union, it is now time to look ahead and to focus on shaping the UK’s relationship with EU members and the international community more widely.
It now seems likely that Article 50 will be triggered by the start of 2017, and this is when the heavy lifting will begin in relation to such negotiations. But while discussions commence, business continues within the EU and throughout Europe. This is particularly true for small and medium sized enterprises with staff and suppliers to pay, orders to fulfil and business negotiations of their own.
Bolstering our funding support throughout Europe
As an international business with more than 40 operations across 14 countries, it’s very much business as usual for us as we continue to support our clients, wherever they are.
In fact, we have bolstered our support for SMEs and just this week announced an additional €200m in funding for European businesses through our agreements with HSBC and the Strategic Banking Corporation of Ireland (SBCI).
Our agreement with SBCI will see us deliver lower cost finance to Irish SMEs and our Pan-European facility with HSBC allows us to boost our funding support for businesses in Germany, Poland, France, the Netherlands, Czech Republic Slovakia and Ireland too.
Such agreements bring our combined worldwide funding capability to over £1bn and present a real opportunity for SMEs to access the funding they need to connect to trading opportunities safely whether they are selling to domestic or overseas buyers.
Asset based finance – a time to shine?
At the very least, businesses looking to develop domestic or international sales, need to ensure they have cashflow in place to support their plans. In recent years, much emphasis has been placed on newer, transactional forms of funding in supporting the financing needs of SMEs.
However, at a time of some uncertainty across Europe in the wake of the EU referendum, we see an opportunity for established asset based financiers to come to the fore to support businesses of all shapes and sizes. Asset based funding is a growing source of funding and according to Factors Chain International, the use of international factoring has grown by a compound annual rate of 24%.
This is certainly a trend we have witnessed at BFS. We have seen an increase in client numbers in recent years and we are now seeing a growing number of enquiries from European businesses looking for working capital support as they seek to increase sales both domestically and internationally. Furthermore, we’re seeing increasing demand from SMEs looking for support with currency exchange as businesses look beyond their own markets for growth.
Forms of funding such as invoice finance grow in line with a business’s sales ledger and this means that SMEs don’t have to take-on additional debt. This provides stability at a time where many SMEs will be reluctant to take on unstructured loans and when some lenders will be looking to reduce their exposure to the SME market.
Businesses like MAAS Aviation, an aircraft exterior finishing company which operates across Ireland, Germany, the Netherlands, and the USA, and Ming Foods, a UK business which produces and exports Chinese pancakes as far afield as the US and Australia, use invoice finance to support their overseas growth.
As markets adjust to a post-Brexit world both in the UK and across Europe, steady cashflow and ongoing support is more important than ever. It’s here that asset based financiers can step-in to support SMEs while at the same time contributing to the growth of local economies.
To find out more about our new funding agreements for SMEs in Europe, visit: www.bibbyfinancialservices.com.