Word on the Street: Not every business fears uncertainty

Over the last few years, uncertainty has dominated the UK business debate. From the hard-to-predict outcome of the EU negotiations, to wider economic and political headwinds, every company faces a short-term future in which it is difficult to plan with confidence.

From the outside, this is often thought to mean businesses are paralysed: unable to move forward until the path ahead becomes clearer. But from my own conversations with customers across a whole range of industries, I hear a more complex story.

Yes, it’s hard to know what is going to happen next, and that is far from ideal. For some, this means sticking to their guns and not making any major changes for the time being. But others are already making plans in anticipation. One GrowthLine borrower is opening up a factory in Europe, so they can get ahead of any restrictions that may come into place. Beyond Brexit, I also have a borrower in the steel industry with operations in the US who is actively expecting to profit from the tariffs that have been imposed on imports.

Speak to enough businesses and you will understand there’s a spectrum of responses to uncertainty. Some want to be in front of the change, while others would rather wait until big questions are resolved before deciding their response. Some are concerned about what changing trade relationships mean for their business, while others undoubtedly see an opportunity to benefit from the disruption.

Importantly, though, what I also hear is that uncertainty isn’t stopping many businesses from investing in growth. In the last couple of months I’ve seen a noticeable uptick in requirement from customers using our GrowthLine working capital facility. In many cases, this is helping support rapid company expansion and revenue growth, as a cheaper and more accessible alternative to a bank overdraft. From a cashflow perspective it can bridge the gap between making a new investment and seeing the revenue return. While for others, it provides the capital needed to invest in people, facilities and customer acquisition.

An advantage of GrowthLine is that it grows with the customer, allowing them to scale up their access to finance as they grow their business. We have customers who, within the course of a year, will double or even triple their lending limit as they invest in expansion. For one company that manufactures lift shafts, this recently helped them move to a new, much larger premises that will be the foundation of future growth.

As relationship managers, we support businesses from multiple sectors and industries, so my portfolio are a truly diverse bunch: from lift shafts to mobile phone covers, car paint, construction sales and fish processing to name but a few. One of the best parts of the job is getting to work with such a wide range of companies, seeing both the similarities and differences, and learning all the time about how we can better support them.

These are companies of varying sizes, in a broad range of industries, but there are some shared characteristics. Most are focused on expansion, whether modest or rapid, and all are searching for a finance solution that is as flexible and growth-minded as they are. Whatever the prevailing political and economic conditions, many SMEs will not be distracted from the priority of building their business, and pursuing their ambitions. That deserves to be celebrated, and supported.

Michael Winterburn is Senior Relationship Manager at Growth Street.

Written on in Business Insights
Senior Relationship Manager