Brian Cantwell catches up with Gavin Wraith-Carter, managing director at Hitachi Capital Business Finance, to talk about the SME market’s growth, dealing with Brexit, and its 2017 Business Barometer.
Hitachi’s 2017 business survey, its Business Barometer, found that confidence concerning Brexit is strongest in the UK’s financial services, particularly in the business-to-business SME sector, and in the manufacturing sector where there has been a 30-49% rise in expectations of growth on December 2016’s survey.
“I think it is a general expectation that financial services is pretty good, as long as you have got the right model, in both up cycles and down cycles,” says Hitachi managing director Gavin Wraith-Carter.
“Most SMEs are getting on with business, and they are more than happy to weather the good times and the bad. Most of them feel pretty confident, and we are seeing opportunities. A few sectors, like hospitality and travel, surprised me a little. I think most believe that, on balance, there are more opportunities than negatives.”
With regards to growth drivers, Hitachi’s survey put keeping fixed costs down as a significant priority for SMEs, while improving cash flow and expanding into new markets rose up the list of priorities, in view of Brexit meaning a departure from the single market.
“They are familiar answers, both pre- and post-Brexit,” says Wraith-Carter. “There will be a huge percentage of businessmen that will always answer to keeping fixed costs down, because that is what they have been trained for years to do.
“Now it has come to the forefront of their mind, because if there is any uncertainty, then keeping fixed costs down is a good way of dealing with it.
“What we’re not linking is keeping fixed costs down, and a lack of investment. Businesses recognise that sometimes to keep fixed costs down, particularly with competition in various parts of the world and in Europe, you still need to be quite efficient.
“Maybe investing is a good way of keeping fixed costs down, rather than growing the workforce and maintaining outdated practices with old-fashioned systems.
“It’s good news for lessors because the stronger the businesses for lending, the more funders that would want to support it. Brexit success is all about keeping the costs down and the cash flow right.”