Following the British Chambers of Commerce’s (BCC) quarterly report and comments from John Longworth, director general, that the small and medium-sized enterprise (SME) market needs funding and confidence to export outside the eurozone, Tony Wilson, director of commercial foreign exchange at Raphaels Bank, has urged the UK government to provide greater support and advice to SMEs on how to trade overseas profitably.
Wilson said: “There is a fundamental lack of confidence among SMEs about how they can protect themselves against exchange rate volatility which is denting their confidence to import and export. This latest report from the BCC demonstrates this – we have seen business performance stagnate with little prospect of improvement in exports, blamed on the uncertainty over the international situation and the eurozone.
“What many SMEs don’t understand is that there are practical steps that can be taken to protect themselves from exchange rate volatility. Certainly, if they are using their high street bank they won’t necessarily be getting the best exchange rates, the service will be reactive and there will be no dedicated FX [foreign exchange] account management. A broker may offer credit facilities which will be attractive to SMEs but invariably the cost of providing this service will be clawed back in charges or the exchange margin. Private banks can offer a good service to SMEs but aren’t always easy to find. The key is to find an FX provider who will recommend the right strategy for your business. Some can fix your payment costs to suit your business and will offer online access to view payments and incoming funds online.”
He added: “It is also worth considering economies outside of Europe that offer huge opportunities to UK businesses. It is vital that the government works with businesses specialising in FX services to support overseas trade as part of its growth agenda.”
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