RateSetter’s business lending lead says political uncertainty will put growth plans on ice.
The ballots have been counted; what happens next is anyone’s guess. The election that Theresa May and the Conservatives called to strengthen their mandate going into Brexit negotiations has backfired – resulting only in lost seats and more uncertainty.
For the UK’s P2P business lenders, a hung parliament spells trouble. As RateSetter Commercial Finance’s managing director Paul Marston puts it:
“Without doubt, a hung Parliament is the worst outcome for the business community. While politicians vie for position over the next few days, a shadow of uncertainty forms, meaning that small business owners are more likely to put their growth plans on ice until the political and economic outlook stabilises.”
Marston’s comments echo those made by Angus Dent, CEO of ArchOver,in the build up to the election. Dent said that the UK’s small businesses need confidence in order to grow, and that the election needed a clear winner to deliver that.
“This means giving one party a mandate to govern so there’s no prospect of another election or referendum in the next five years,” he told AltFi. “Policies change but as long as there’s a clear winner that can take us in one direction – whatever direction that might be – then we stand a chance of success.”
While the outcome of the election will clearly disappoint the likes of Dent, RateSetter’s Marston did caveat his comments to suggest that SMEs will continue to achieve growth in the longer term.
“UK small businesses have experienced coalition government before, and excel at adapting to new circumstances,” he said.
Now they have yet another new set of circumstances to adapt to.