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• 02 Jan

  Resilient Financing for SMEs Navigating Supply Chain Shifts Post COVID and Brexit

  

  Adapting Supply Chain Strategies in a Post-COVID and Post-Brexit World

  The landscape of supply chain management is undergoing a seismic shift in the wake of COVID-19 and Brexit, compelling businesses to reassess their operational strategies. Particularly for small and medium enterprises (SMEs) in importation and manufacturing sectors. The traditional reliance on Just-In-Time (JIT) methodologies is proving increasingly untenable as delays affect the supply chain.

  The Dilemma of JIT in Today's Market

  Historically, JIT has been the linchpin for SMEs, minimising stock holding costs and enhancing efficiency. However, current global disruptions – from supply slowdowns in China to geopolitical tensions – are eroding the reliability of JIT. Businesses are facing unprecedented delays and uncertainties, making JIT a less viable option.

  Rising Costs and Stock Holding: A New Reality

  As a direct consequence of these supply chain disruptions, the costs of essential goods are escalating rapidly. Companies are now compelled to purchase stock earlier than usual to hedge against these price hikes, leading to products being stored for extended periods before installation. This new reality of stock holding introduces additional financial strains, as capital gets tied up in inventory, lying dormant in warehouses.

  Innovative Financial Solutions for New Challenges

  In this new era, where stock holding becomes a necessity rather than a choice, innovative financial solutions become crucial. Our role as financial brokers is to bridge this gap, offering tailored financial products like invoice finance, stock finance, and business loans.

  1. Invoice Finance: This solution allows businesses to free up working capital from unpaid invoices, providing immediate cash flow to manage day-to-day operations.
     
     
  2. Stock Finance: Particularly beneficial for those transitioning to greater stock holding, this option offers the liquidity to purchase necessary stock without straining cash reserves.
     
     
  3. Business Loans: For broader financial needs, business loans offer a lump sum that can be used for various purposes, including bolstering inventory or expanding storage facilities.

  Navigating Through Uncertainty with Strategic Financing

  The shift from JIT to increased stock holding, while challenging, opens new avenues for strategic financial planning. By leveraging the right mix of invoice finance, stock finance, and business loans, businesses can navigate these turbulent times with resilience and adaptability. As financial brokers, we are committed to guiding SMEs through this transition, ensuring they emerge stronger and more versatile in the face of global supply chain challenges.

  By Glenn Blackman