Luke Davis, CEO of IW Capital discusses the impact the trade deal will have on SME investment and private sector growth in 2021

The markets are already rallying after the past few days of uncertainty as a UK deal with the EU finally looks likely.

Following intense negotiations that carried on into last night, it is expected that Boris Johnson will today announce that a trade deal with the EU has been agreed which will map out the UK’s relationship with the continent post-Brexit. News of the potential deal has been welcomed by many after months of a no-deal looking increasingly likely. The deal will avoid the automatic introduction of tariffs and taxes on traded goods that otherwise would have been subject to WTO regulations.

An UK-EU post-Brexit trade agreement presents promising growth opportunities for SMEs as we enter 2021, as always, the early indicator of a rise in the pound was mirrored by the FTSE 100 and 250; a welcome sight to investors and small businesses alike. These stock economic triggers provide much-needed fuel for a private sector ravaged, as with all crises of this magnitude, once the hallmarks of economic recovery begin to tick off, soon ensues a more buoyant investor sentiment and subsequent flow of capital to the private sector. This boost in optimism comes after it was revealed earlier this week, that the number of online job advertisements has reached 1.4million for the first time this year, further highlighting business growth across the country which is sure to extend into the new year.

With a 12% increase in new businesses starting up during 2020 compared to 2019, and now with a trade deal in sight, the new year is set to create some exciting investment opportunities for investors throughout the country and some that are sure to boost the wider British economy. It is without doubt critical – in order for multiple growth engines across the UK private sector to fire on all cylinders – for confidence to resume across the entirety of the investor landscape. From angel syndicates to institutional funds, the pandemic has not reserved its wrath for certain pockets of business, instead delivering a blow to the strongest of high growth entities.

In a year where resilience planning was provided a new meaning, Brexit provides the nation’s community of entrepreneurs an opportunity to truly springboard to an increased global audience and revised trading infrastructure, whilst working from a more streamlined, nimble operational model. The opportunities are plentiful, but in order to be fulfilled in a manner that safeguards resilience and growth, investment catalysts from confident investors is a decisive stepping stone to success.

CEO of IW Capital, Luke Davis says:

“A UK-EU trade deal, and crucially certainty for firms waiting for one, would be a big boost for small business throughout the UK and will provide some respite as we end a year of unease and uncertainty. The new year is set to create some exciting investment opportunities both for growing SMEs and larger firms, and is sure to have a huge impact on our economy, being a vital catalyst in the resurgence of employment.

“Working with both entrepreneurs and investors, we’ve seen a clear desire from the small business community for growth investment and to take a big step growth-wise in 2021; now, with a trade deal likely, this is sure to increase. Small businesses grow by hiring and this sector will be key not only to growing the economy but also combating unemployment. Each piece of good news such as this and the vaccine rollout programme will increase the confidence to hire new staff and kick on with business plans.”

About Lisa Baker, Editor 262 Articles
Lisa Baker is the Editor of Always Finance, and writes about Business, Finance Technology and Healthcare. Lisa is also the owner of Need to See IT Publishing.