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Even if the Government has ‘reports’ on the UK’s future after Brexit, it would remain foolish to rely on expert opinion about an event which hasn’t already taken place

December 27, 2017 Leave a comment

download (9)Brexit has been created by a phenomenon, the elements of which many of us are still failing to understand. For non-decision makers, this is just a social problem between people who are usually friends. But for our politicians it has now become an elaborate game of pin the tail on the donkey which risks much more than a simple prick to the finger if they get their blindfolded judgement wrong.

The exquisite mix of having a government led by people who do not believe in what they are doing, trying to deliver working solutions to problems that they do not understand would in any other situation be recognised for what it is. But politics has regrettably moved on from an age when it really was in some way chivalrous – if it ever really was, and power being all, is all it has now become.

This insidious environment does not lend itself well to the power of original thinking. Trust has become as interchangeable with myth as proof has become with fiction, and unrelated history has become the benchmark of reliability against the future that we can also not personally see.

Measuring the possible impact and consequences of Brexit against such a backdrop is therefore down to either fortune telling – which is at best no more than ‘an educated guess’, or of relying upon economic viewpoints and philosophies which have been developed on the basis of events that have already passed, rather than what will actually happen in the future.

Put simply, nothing like Brexit has happened before and nor will it happen again, as even the smallest difference – perhaps down to the outlook of just one of the key players involved, could deliver an outcome which we could never imagine.

That the Government and Ministers responsible for any part of the Brexit process may or may not choose to rely upon reports which have been devised in this way and within this unique set of circumstances, is perhaps more about their own take on the opinion of others, rather than anything we could really label as setting out to deceive.

Whether they be Specialists, Experts, Economists or not, it is little more than opinion that they actually give and we would all do well to remember that even then, nobody has the ability to offer such ‘expert analysis’ of an event which has not already taken place.

Yes, we all have concerns about what is to come as a result of Brexit. But staying within Europe would not in any way have meant that a stable future of any kind was assured. And it remains worthy of note that whilst Brexit may prove to be temporarily challenging for us, for the UK to have remained a member of the EU may in time have proven to be truly catastrophic.

 

image thanks to fortune.com

Peer to Peer unsecured business lending for SME’s is on the rise. But are you surprised?

The internet culture of openness and sharing is promoting massive changes for businesses of all sizes, as the continuing upsurge in businesses aiming to develop both our social media knowledge and use will easily confirm. But the gaps which have been bridged in one way by new basic communication mediums are now developing into fully fledged by-passes in others and not least of all through the proliferation of peer-to-peer lending sites such as Funding Circle.

When taking my first real plunge as a start-up with a solid distribution contract 8 years ago, I would have leapt at the chance to obtain £250K unsecured lending from a range of private investors. Instead, I had no option but to give a charge against the equity on my home to a high street retail bank. I’m sure that many who have driven the development of an SME whilst being the sole bread-winner at home will relate to the experience of having your partner crying as you call in at your solicitors to complete the paperwork.

But business is inherently risky, and that’s why not everyone does it – or receives the benefits that come with it. Banks however, look very much like they have become ‘penny wise and pound foolish’ when it comes to business vs corporate lending and you won’t have to dig far in to the realms of the recent Banking Crisis and the current Eurozone debacle to see where the big money has been going.

In the past, decisions on lending were actually made by a branch manager at the local bank, who wouldn’t have to talk to a faceless lending ‘specialist’ on the phone or enter all the relevant data onto a network to see if your sweat-soaked business plans were credit worthy, because they took the time to know a client and could see where real risk would lie. I can honestly remember the reverence that the ‘bank manager’ was given when I was a child – not unlike that of a GP or a Dentist. And Oh… how the times have changed.

I would guess that I am far from being alone in having sat with a Business Relationship Manager to talk through the acorns of an idea to see if the will was there to provide funds, before taking a nod away with meto go and commit many further hours of work to creating a written business plan, to then have it quashed in moments when it travels further up the chain by someone or something which basically has nothing more in mind than having one’s cake and then eating it. Put bluntly, it looks very much like interest, security and surety are the 3 requirements of high street retail business banking to small and new business today, and any more than  2 such caveats are not only unrealistic, they are wholly unreasonable.

Not one moment too soon, peer-to-peer lending has arrived, giving entrepreneurs the opportunity to put great business ideas to open-minded lenders who are able to listen to the thought and actually experience the passion behind an idea, and then make an emotional evaluation of the weaknesses and strengths of that concept or perhaps just a plan for expansion, before deciding whether they want to make a similar leap of faith. Even the Government has been caught on-the-hoof with this growing concept pledging no less than £100 Million to support this type of borrowing.

The irony is that for those ‘peers’ choosing to lend and perhaps spread £100K in £5K chunks across 20 different projects, they are spreading their risk widely after making a proper evaluation of all the lending AND receiving a good level of interest too. Banks would perhaps do well to bear this in mind as they go chasing the sure-thing of that golden egg dropping into the basket which comes from a hen with a great set of teeth…

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