New financial technologies can keep British exports thriving regardless of the outcome of the Brexit referendum, an expert panel agreed on Tuesday. In a seminar hosted by the Association of Chartered Certified Accountants and attended remotely by almost 2,000 individuals, 41% of those polled said they think a Brexit would be bad news for their business, whereas 4.2% thought it would be good news. Just over 20% said they were already exporting, with 58% of those selling to Europe. Some 34.2% said they were thinking about exporting in 2016, but are concerned about the risks.
“Exporting can be a powerful driver of business growth,” Lord Digby Jones, a former Minister of State for Trade and Investment and non-executive director of URICA, said. Lord Jones has led over 20 trade missions travelling to 31 countries in 45 overseas visits. According to him, SMEs that export stand an 80% chance of being more successful in their domestic market as a result. Lord Digby Jones spoke at a seminar hosted by early payments network URICA.
“The greatest thing about exporting is not having a wider and bigger market, it is that you actually become more competitive at home,” he added. “You expose yourself to so many more ideas and different ways of doing things, you learn from your rivals in other markets who might not be in Britain. It all helps you to become more productive and successful in your home market.”
Leaving the E.U. would set British business free, said Lord Jones. “More than 50% of our trade is with the rest of the world,” he said. “If we Brexit, I am very confident that British goods and services will get round the world in a way that is set free. If we stay in, then it won’t be Armageddon either.” Anne-Marie Martin, Chief Executive of the Council of British Chambers of Commerce in Europe, encouraged those looking to export to travel to the countries to they wish to sell. “It is absolutely imperative to visit again and again,” she said, adding that in the event of a Brexit, “business will continue to do business.”
With knowledge about the tools, processes and payment security options, export it can be an easy and safe way to expand business, said Stephan Haushofer, of Paris-based AU Group, the world’s largest trade insurance and finance broker. “The key objective is to be paid in full, and paid on time.” Working with a credit insurer and financing invoices are the best ways to achieve that, he said.
“If we can solve the problem of late payment for SMEs, then overnight they would be able to repay every bit of bank borrowing that they have; we would unlock the biggest handbrake for SME growth,” said Lindsay Whitelaw, founding partner of Artemis Investment Management and Chairman of URICA. Bar all customers paying all invoices within a few days, he contested the best solution to this problem is the URICA platform.
“The government has funded this idea to make sure it happens,” he said. As long as a customer, no matter where they are located, is credit worthy and agrees electronically to pay their invoices, URICA will pay a supplier immediately, and take payment from the customer up to 90 days later, giving the customer extended credit terms. The URICA platform, which is 50 percent funded by the British Business Bank, works strategically with Euler Hermes, the world’s largest credit insurer, allowing it to rate companies extremely quickly, said Mr. Whitelaw. Millions of pounds in invoices across 20 countries have already been paid through URICA, he added.
FinTech solutions like URICA, contested Mr. Whitelaw, will act as a one-stop shop for international trade, removing the need for letters of credit, currency hedging, insurance, legal advice and bank-led funding in one simple step. “It is exactly the same as if their customer had paid cash into the supplier’s bank account, end of story. This sounds simple, and it is simple, but it has a dramatic impact,” he said.
“For a single charge on each invoice that is half the price of similar processes, things like personal guarantees, securities, and indebtedness are consigned to history if people use the URICA product. Furthermore, if you are invoicing in another currency URICA takes on all the risk of currency movements.”
“The FinTech that will make the grade will have the great idea, the funding and credit terms, the insurance and the international . URICA has all of that; it takes all the risk off the table,” said Mr. Whitelaw. “We are set up specifically to help SMEs export and increase growth. We want to do business and help SMEs to export, which by definition is going to help the economy.”