EU Exit Business Readiness Forum: Information for businesses on a no - - PowerPoint PPT Presentation

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EU Exit Business Readiness Forum: Information for businesses on a no - - PowerPoint PPT Presentation

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EU Exit Business Readiness Forum: Information for businesses on a no deal exit from the EU Thursday 11th April 2019 These slides reflect government policy as of 11th April 2019 Objectives for these forums Share the key information businesses

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EU Exit Business Readiness Forum: Information for businesses on a no deal exit from the EU

Thursday 11th April 2019 These slides reflect government policy as of 11th April 2019

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Objectives for these forums Share the key information businesses need to prepare for Exit Provide you with materials to cascade to your network of members Respond to your questions and gather your feedback

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Agenda for today

1 Welcome and Introductions 5 mins Parliamentary Update 2 10 mins Access to finance and the British Business Bank 3 20 mins Q&A/AOB 4 10 mins

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Agenda for today

1 Welcome and Introductions 5 mins Parliamentary Update 2 10 mins Access to finance and the British Business Bank 3 20 mins Q&A/AOB 4 10 mins

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Agenda for today

1 Welcome and Introductions 5 mins Parliamentary Update 2 10 mins Access to finance and the British Business Bank 3 20 mins Q&A/AOB 4 10 mins

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Access to Finance and the British Business Bank

Francis Evans

Head of Business Finance

Thursday 11th April 2019

These slides reflect government policy as of 11th April 2019

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Access to Finance

  • Our objective is to ensure that all businesses have access to

the finance they need to start, grow and stay ahead

  • This includes debt, equity and asset finance
  • We focus on ensuring informed demand as well as adequate

supply for each stage of growth, from start-up loans to long-term equity investment (patient capital)

  • Our key partners are the British Business Bank (BBB) which

is the UK’s development bank, and UK Finance which represents banks and other finance providers

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SME Finance Markets – a story of subdued demand

  • Use of external finance (of any kind) stands at 34% for all

SMEs, rising to 77% for those with 50-249 employees

  • 48% of all SMEs are ‘permanent non-borrowers’ (PNBs)
  • PNBs are as profitable as other businesses, though less

innovative and less likely to be planning to grow

  • 73% of all SMEs would prefer not to borrow, even if this

meant foregoing a growth opportunity

  • The cash balances of SMEs outweigh their borrowing by 2:1
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SME Finance Monitor shows the drop in demand…

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…and high chance of success for established SMEs

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The UK’s banks are transformed since 2007

Chart shows Tier 1 capital ratio of UK’s 7 largest banks

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Market gaps (and actions)

  • New businesses find it harder to borrow (Start Up Loans)
  • Less established businesses with little collateral also find it

hard to borrow (Enterprise Finance Guarantee)

  • SME lending is highly concentrated (ENABLE programme for

smaller providers, including asset finance)

  • Equity finance is harder to obtain and the fund sizes are

smaller than in the US (BBB equity programmes)

  • There is a disparity between London and other regions

(Debt + equity funds in the Midlands, North & Cornwall)

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The British Business Bank (BBB) is the UK’s domestic development bank

A plc – 100%

  • wned by UK

Government Wholesale – work with 100+ partners

  • Provides SME financial

products, debt and equity

  • Focused on smaller UK

companies (<250 staff)

  • Market led, commercially

minded, profits go to HMG

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The BBB’s six objectives (we added two in 2018)

taxpayers’ resources efficiently within a robust risk management framework

REDUCE IMBALANCES ACROSS THE UK

in access to finance for smaller businesses, including identifying gaps

CENTRE OF EXPERTISE

  • n smaller business

finance for Government

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Performance against objectives

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Six largest investors into UK VC funds 2010-2018, £m

The BBB is established as the second-largest investor into UK venture capital funds

822 498 138 131 84

BBB EIF

50

West Midlands Pension Fund

Singapore Sovereign Wealth Fund

UK accounts for ~50% of EIF’s total investment in European VC

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Where do individual businesses find information?

  • Potential impacts: EU Exit portal

https://euexit.campaign.gov.uk/

  • Understanding options: the Finance Hub (BBB)

https://www.british-business-bank.co.uk/finance-hub/

  • Planning and applying: Let’s talk business (UK Finance)

https://www.ukfinance.org.uk/policy-and- guidance/guidance/lets-talk-business

  • Access to finance: via individual providers
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“Let’s talk business” headings

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Questions?

francis.evans@beis.gov.uk

Useful searches: ‘SME Finance Monitor’ ‘Small Business Finance Markets 2019’ ‘UK Finance SME Lending’

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Agenda for today

1 Welcome and Introductions 5 mins Parliamentary Update 2 10 mins Access to finance and the British Business Bank 3 20 mins Q&A/AOB 4 10 mins

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You may have further questions on these and

  • ther issues. Please visit gov.uk/euexit for

more information If you have questions about the EU Exit Business Readiness forum, please contact sed@beis.gov.uk