Cash Flow concerns for engineering, manufacturing sector allayed by SMMT announcement; invoice loans can compensate for compromised capital; asset finance the option for businesses as they react

CASH Flow across the engineering and manufacturing sector could be compromised by the impending changes to customs arrangements and the wider supply chain.

The SMMT has announced a Brexit Readiness Programme to support businesses across the aforementioned sectors, but issues still remain regarding investment.

Increased warehouse capacity; a change in material stocks, and investment in more staff will be needed to ensure of compliance with international markets, space to hold the goods, and supply that new demand.

Proposals by the SMMT will support businesses cover any impasse created by any tariff or customs changes, but this will only offer temporary solutions that will be more expensive than they are now.

In order to prepare ahead of the potentially challenges faced by either a no deal Brexit, or changes to how items can be imported and exported, investment will be needed, but the purchasing of goods is not necessary.

Leasing products through asset finance can provide the stimulus and inertia to support your daily business operations, scope to grow, and lower your tax liabilities.

The leasing of goods ensures you negate the need to pay tax on the goods, while the arrangement ensures you have the ability to hand the product, piece of equipment, or facility back, should circumstances change.

Refinancing, too, is an option for any business disconcerted by the ongoing uncertainty pre-Brexit.

Should you begin leasing additional warehouse space, for instance, but find that a deal is subsequently concluded that renders the need for it redundant, your business can refinance an agreement against a new asset that will bring benefit to the company.

Consumer demand for hybrid and electric vehicles is increasing, thus facilitating the storage spaces and conditions to contain such articles will be imperative to supplying this existing demand.

As opposed to investing in new pieces of equipment or other hard assets with working capital, leasing the articles through asset finance will ensure you save your existing funds.

This could be used to optimise cash flow through any periods of uncertainty; cover the costs associated with paying import tariffs, customs paperwork, or even employing new members of staff.

Without such reserves, your business could be forced to initiate emergency business loans in 2020 that will most likely carry increased interest rates.

Inflation has not been falling, and with interest rates set to increase to induce the former’s reduction, an asset finance arrangement could not be cheaper.

SMMT’s Brexit Readiness Programme will provide temporary, guaranteed respite, but through asset finance now or a business loan from Portman, lower interest rates can be secured before its too late to react.

Cash flow will be guaranteed regardless, but through tariff-covering, invoice-mitigating loans, and asset finance agreements, you can ensure that you have the equipment and facilities in place to grow – whatever the outcome of the Brexit negotiations.

This avenue of investment ensures that you are facilitating increased growth and protecting the capital that will be crucial to seamless operations during this period of potential transition.

Head of Marketing at Portman Asset Finance urged business across the engineering and manufacturing sectors to act quickly to avoid increased costs. He said: “Businesses need to adapt to changing consumer demand and Brexit is continuing to present a potential risk to cash flow.

“Inflation has risen to six-month highs and interest rates are set to increase to combat this – securing an asset finance arrangement or cash-flow protecting business loan now is pivotal.”

Contact Portman Asset Finance on 01604 761 276 and sort your financial requirements with business asset finance solutions from the Nucleus Broker of the Quarter.


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