The loss of passporting for UK private equity and venture capital firms following the UK’s exit from the European Union threatens finance for small companies the Federation of Small Businesses has warned.
The lobby group says EU funding has helped tackle supply side challenges and wants the British Business Bank to replicate this support post Brexit.
“Maintaining EU passporting rights for the UK’s private equity and venture capital industries as part of a transitional arrangement is another must,” says chairman Mike Cherry.
“If we want to see a step change in productivity post-Brexit, ensuring small businesses can access long-term finance at the right time in their lifecycles will be critical.”
The FSB found in its Q2 survey of members that sentiment was up compared to the same period last year, but is down on Q1.
The government must address talent, trade and a transition period to secure a pro-business Brexit, the report says.
Investor appetite is also being dampened by uncertainty, says Cherry.
The industry also faces demand side challenges with small businesses relying on loan and overdraft facilities, the FSB notes.