Brexit cash-flow fears for small UK manufacturers

Smaller firms have large inventories and low cash flow Credit: Shutterstock

SMALL British manufacturers have suffered cash flow problems due to Brexit or rather the lack of it.

When one considers that Brexit has become a movable feast, it has to be remembered that the government has accepted and even warned that there could be significant delays or shortages in many areas especially if there had been a no deal Brexit.

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Companies have therefore needed to stockpile certain material such as parts for machinery and raw material to allow them to continue in business in the event that Britain crashed out of the EU.

Now with the possible delay until the end of January, the fact that there could be a change of Government which could still result in a Hard Brexit, no Brexit or further delay, those businesses are in something of a quandary as to what they should do in the interim.

Their problem is that the imports that they have purchased are not only taking up valuable space but are a drain on their finances and although they will no doubt be able to use all of this material in the long-term, it won’t be much use if they run out of money to stay solvent.

Alternatively, if they do suddenly experience a run of orders due to the delay and retailers or distributors suddenly stocking up whilst they can, there will be the further conundrum of whether to import new raw materials or not.


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