Brexit: the impact on liquidity
In response to the UK’s exit from the EU, the Bank of England injected £3.1 billion into the country’s banking system in a bid to prevent any panic as it was predicted that a Brexit could potentially lead to higher funding costs for UK corporates as funders re-evaluate credit risk and seek to pass on their increased costs of capital.
In light of this, it is important for all businesses to review their current and future expenditure needs and put together plans to see them through this period of uncertainty.
They will need to consider alternative ways of meeting this expenditure and managing their working capital. One option would be to consider the financial resources required by your business and arrange to borrow from lenders in advance, rather than waiting and potentially being unable to do so later on.
In some cases, they may have to defer some of their planned projects for a time and cut off any unnecessary spending to retain or even maximize their liquidity.
If you have any immediate Brexit questions please email us or send enquiry as we are interested in discussing this with you.