Trade Finance: What Your Business Needs

Since Britain’s decision to leave the EU, the UK has experienced a whirlwind of changes, including the political and economic trade agenda which has altered the UK trading relationships for goods and services, not only in Europe but across the world.

What the Current Trading Environment Means for Your Business

The UK’s trade position has weakened over the last two decades, with the nation’s share of import trade dropping by a staggering 30%, and exports by over a half! Previously the UK had ranked in 6th position amongst other exporting giants – America, China, Germany and Japan – yet its position has continued to drop since 2016.

Despite this, Britain has remained Europe’s key destination for foreign direct investment, with the country reporting goods export figures of over £41bn for 2017. But as Britain prepares to leave the EU, it looks away from Europe for major trading deals, and toward the Commonwealth, Malaysia, India, United States and Mexico for trading partnerships that we hope will replenish our economy.

Reports suggest that despite the national interest in new trading relationships from Brexit, worries are escalating, not only in our ability to identify and secure lucrative opportunities but regarding the risks that Brexit poses to business operations (with Santander’s latest ‘Trade Barometer’ recording concern rates at 66% amongst British companies). From the same findings, 73% of the 1,000 businesses surveyed stated that a UK economic slowdown would have a negative impact on their business.

The pound saw a 12% drop against the USD after the referendum, marking its 30-year low. For any business importing from the US, or acquiring goods and services from the country, there has, understandably, been a substantial impact on their P&L.

The weakening of the GBP against the dollar and the euro resulted in several negatives. The referendum has had a serious knock-on effect on imports, with prices rising as a result of a weaker pound and a subsequent rise in inflation (which went up to a historic 3.1% in November 2017, and 3.6% for food price inflation). Oil price increases and sluggish income growth contributed to the slower economic growth and led to a pitiful 1.4% UK growth forecast for this year.

That being said, UK exporters, predominantly in the services industry, benefitted from the decreased value of British currency. Surprisingly, the UK economy has fared quite well, all considered, with bank chains supporting their UK locations and the BOE’s measures to minimise risks and stabilise the markets.

Brexit has presented a monumental and complex challenge that many organisations hadn’t, and are still struggling, to prepare for. Active debate continues on whether Britain will face a hard or soft Brexit. A hard Brexit outlook will see the GBP weaken, yet Trump has recently commented that a soft Brexit will kill the UK’s chances of an important US-UK trade deal. A soft Brexit, on the other hand, would see a strengthening of the pound as anticipated by FX movements and more wiggle room with setting up a trading agreement with the EU, but more red-tape when it comes to trading with non-EU countries.

With still no real certainty in the direction we’re heading, having a currency strategy can help to weather the potentially volatile currency currents we’ll find ourselves in, in addition to safeguarding your bottom lines with competitive rates and hedging arrangements.

How Trade Finance Will Help Your Business Trade

Concerning both international and domestic trade, Trade Finance encompasses Structured Finance, Receivables Finance, Export Credits, Bank Loans and Guarantees, and Letters of Credit. It is one of the traditional ways of financing which aids importers and exporters in financing trade, without the need for balance sheet or working capital finance within the company to finance the entire trade.

According to the latest figures, a majority of business is operated on an Open Account basis, leaving organisations open to substantial threats such as fraud and uninsured transactions, and can see companies struggle to conduct business in various markets. Trade Finance, on the other hand, puts structures in place that assist businesses who are competing for large, multi-supplier projects across many countries. This methodology helps to diversify revenue streams, open doors in new markets and create healthy competition in the global marketplace. Essentially, trade finance functions by introducing a third-party to reduce payment and supply risks, whilst ensuring the importers receive their goods (as agreed) and exporters receive extended credit, and thus, important for all businesses looking to secure finance and their trading operations. It works by confirming banks within alternative jurisdictions of trade to eliminate big risks that come from trading in other countries, such as no payment, lost or damaged goods in transit and payment schemes.

Free your working capital; export more; expand your trading web whilst mitigating supplier risk, all with the assistance of trade finance advice from specialists at Expense Reduction Analysts. We help you achieve a strategic approach to finance and banking by providing practical and impartial advice and solutions. The Banking and Payments team have developed a host of specialist services, encompassing Liquidity and Cash Management, Borrowing and Growth, Payments and Trade Solutions, to assist each organisation with their individual needs and requirements. Get in touch with the Banking and Payments Team today for your no-obligation consultation.

Article by: Harvinder Rattan

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Are You Brexit-ready?

Another Brexit crisis is looming, creating even more uncertainty for UK businesses. Last night’s resignation of David Davis, the Brexit Secretary, was followed today by that of Boris Johnson, the Foreign Secretary.

It leaves the UK political landscape in considerable turmoil with plans due to be submitted to the EU for negotiation by October. At this stage, the UK’s position looks increasingly at odds with being able to deliver against the vote.

Whilst the conclusion is uncertain, the fact remains that without a clear picture of what the future looks like, British businesses – from all sectors – need to be working on their plans to counter any issues that will be caused to them by the three main issues:

  • Future UK productivity and Trade Relationships
  • Staffing and Freedom of Movement
  • Customs Union and Supply Chains

All is explained by our must-read guide – Are you Brexit-ready? Get your FREE copy of our Brexit White Paper today!

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9Round Franchise Founder Discusses the Role of Fitfluencers in Growing a Fitness Brand

Attention Fitness Buffs: Have You Considered a Fitness Franchise?

Data from Statista says the North American fitness market had an estimated size of more than $28 billion in 2015, of which 90 percent was attributable to the United States. The U.S. brings in more fitness and health club revenue than anywhere else in the world and has the most active members too.

According to Joel Libava of, there are more than 60 different fitness-related franchise opportunities to choose from, as he wrote in an article earlier this month.

If you’re exploring the franchise world, owning a franchise in fitness could be a profitable choice if it’s already your passion. And “fitfluential” customer service strategies might be a key ingredient to long-term success. The word “fitfluencer” is exactly what it sounds like: an influencer (or an influential brand) with a focus on fitness.

In a market as big as this, there’s adequate room for niche specialties, franchises, personal brands and there’s even overlap if you get creative on social. While relationships are important in any business, one-on-one encouragement stands out in fitness and, for small businesses, it can be the difference between having a long-term customer who advocates for your brand and a customer who doesn’t want to renew.

Small Business Trends connected with Shannon Hudson of 9Round kickboxing to get a better sense of the brand and its niche as a fitness franchise.

Shannon “The Cannon” Hudson, founder and CEO of 9Round Franchising, LLC, is the former IKF Light Middleweight Kickboxing Champion of the World. Hudson began martial arts at the age of seven and has continued training ever since, including with legendary boxing trainer Xavier Biggs. He has a 5th degree Black Belt in Japanese Shotokan Karate and a 4th Degree Black Belt under Joe Lewis’s Fighting System JLFS.

After over 70 bouts inside the ring, competing in Canada and Europe, Hudson could not find a place where the average person could learn the training secrets of pro fighters. So, the vision for 9Round was born. Hudson decided to transform the grueling boxing and kickboxing workouts of the pros into a non-intimidating, convenient circuit workout format the average person could enjoy. Now, 10 years later, 9Round has more than 700 locations worldwide. Hudson is still fully involved in the day-to-day operations of the business and constantly works to bring the best support to 9Round franchisees and the best workout experience to 9Round members.

* * * * *

Small Business Trends: How have fitfluencers and social media affecting the fitness industry?

Shannon Hudson: Both have helped the fitness industry grow by deepening the way we communicate with our audiences. We are now able to continually encourage and guide our community towards their goals both inside and outside of the club. This strengthens our relationships and allows members to see results at a faster pace. In addition, fitfluencers are providing authenticity and widening our audience reach by communicating real results and interacting with followers on their own social channels.

Small Business Trends: What makes a fitness franchise successful?

Shannon Hudson: There are two key elements to making a fitness franchise successful. One is motivation. It’s important our franchise owners are joining 9Round for the right reasons. Our owners must be motivated by their passion for fitness and not just seeking monetary reward. We want our owners to be able to share their health and fitness interests with the community, as well as dedicate their business to helping members reach their goals. Second is relationships. At 9Round, we focus on selling relationships, not just a gym membership, so it’s important our franchise owners love people and see the value in building strong relationships. By interacting with members on a personal level, 9Round sets itself apart from traditional gyms and allows owners to be fully invested in their business.

Attention Fitness Buffs: Have You Considered a Fitness Franchise?

Small Business Trends: How do your national franchisees differ from your international ones? With over 700 locations worldwide, I assume there are differences.

Shannon Hudson: Typically, 9Round remains exactly the same no matter the country because the workout and business model are easy to adapt. The only subtle differences that may occur would be a result of a cultural or climate difference. For example, in the US, our clubs have a smaller footprint including the workout space, an administrative area, and a bathroom; in the Middle East, locker rooms for changing and showering are required. In Japan, since there is not an obesity concern, like there is here in the US, the program is marketed as a “30 Minute Stress Buster,” rather than for weight loss.

We anticipate small adjustments, like the ones mentioned above, to continue to be adaptations we will have to make as we expand to cultures that differ from our own. However, we plan to remain true to our core product and will not alter that, as it makes sense in every international market we enter.

Small Business Trends: If someone is interested in joining the 9Round franchise family, what are some initial things they should be aware of?

Shannon Hudson: 9Round franchises are a popular investment due to the low startup cost and winning fitness concept. The average total investment is between $91,600 and $133,200, compared to traditional gyms, which typically require expensive equipment, such as treadmills and weight machines. In addition, 9Round only requires a max of four-five employees and operates in a low rent space of 1500 square feet. 9Round appeals to young professionals, fitness enthusiasts, parents and anyone looking for a fast and effective workout. 9Round eliminates class times and time constraints, allowing members to walk into the club whenever they find time and engage in a full-body workout in just 30 minutes.

Images: 9Round Franchising

This article, “9Round Franchise Founder Discusses the Role of Fitfluencers in Growing a Fitness Brand” was first published on Small Business Trends

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Brexit Update: Cabinet Congregate at Chequers for Meeting

Cabinet ministers gather at Teresa May’s countryside retreat (Chequers) to discuss Brexit deal. They have been seen on the terrace, enjoying the rare British sunshine.

Today, ministers are considering an alternative “third-way” on future customs arrangements. This new idea, aimed to keep the borders frictionless, is currently being discussed at the Brexit summit. No. 10 had kept tight-lipped, even to cabinet ministers attending the Chequers meeting today, about what this option was. Considering both EU and ministers had dismissed May’s preferred customs partnership option as unworkable, as well as the Max Fac model, Britain eagerly awaits what this third option entails. It had been thought that this third option would be more in line with the customs partnership, which was winning arguments in cabinet because of its cheaper running costs. This third option is a so-called “facilitated customs arrangement”, which was announced just a day before today’s talk at the Chequers court; ministers will provide more details in the upcoming White Paper due for release on Monday. 

This third way is proposed to solve the issues regarding custom arrangements on the Irish border, with the hope that it will bring a welcome compromise to the wants of both Brexiteers and Remainers. Britain would essentially have the freedom to set its own tariffs, with technology being used to determine whether goods end up in Britain or the EU- where the applicable tariffs would be set.

May has pleaded with the rest of her party to support her future decisions during a speech at the summer ball at the beginning of the week, saying: “Will we find the boldness, the courage and the discipline to unite as one for the good of our nation and fellow citizens? Or will we be divided and allow the scale of the challenge, the complexity of the questions to overwhelm us?” To which the BCC has told politicians to cease with their “squabbling” and to put Britain’s economic interests at the forefront of their agreements at today’s meeting.  

The government has made little headway on the 23 major issues (including VAT, tariffs, customs and regulations) that British businesses need clarity on in order to plan their post-Brexit trade; the hope is that after today, British businesses will start getting more answers instead of having to ask more questions.

These talks come as British businesses voice their lack of patience with the progression of the Brexit talks, according to City organisations, with a group of Britain’s market-leading professional and business service firms handing May a list of their demands in order to ensure organisations can have more effective business cost management plans in place for Brexit. The letter states: “The UK needs to get the right deal on professional and other services given our relative strengths and current competitive position.”

BBC reporter, Simon Jack reports that “the government IS hoping that business will do its bit by responding positively to what the government will claim is a new level of post-summit clarity.”

Senior cabinet ministers are hopeful that today’s summit will be a huge moment in the Brexit timeline by providing a substantial step forward in organising post-Brexit internally. This will then allow them to look toward the EU to settle on solutions that benefit both economic interests.

According to headlines on The Guardian online, the ‘EU says it won’t let UK damage single market as cabinet debates May’s Brexit plan at Chequers’. Yet, a chief Brexit negotiator for the EU, Michael Barnier, has said in Brussels today, according to journalistic reports, that he does not want to comment on May’s Brexit plans just yet, wanting to give his team more time to examine UK proposals ‘precisely and objectively’.

We will all have to patiently wait and see what direction the Brexit negotiations are going down according to these new plans. If you are not yet Brexit-ready, get in touch with our specialist team today to see what changes and preparations your organisation can make to future-proof your business.

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Fuel, Confused Policy and Price Increases

It probably escaped most people, but there was an underlying increase in the cost of petrol, diesel and Gasoil on 15th April. This is because the UK Government-mandated proportion of bio-fuel to be mixed with mineral fuel increased from 4.75% to 7.25%. Bio-fuel costs more and achieves higher prices on the wholesale markets, therefore increasing the proportion, and leading to a price increase.

The enabling legislation for this was approved by the House of Lords on 6th March, without any opposition. The same enabling regulations also made provision to increase the proportions to 8.55% on 1st January 2019 and 9.755% the following year. This is generally perceived as being a “good” thing because there is less carbon impact from bio-fuel than mineral fuel. Perversely, given the current perception that diesel is a “bad” fuel due to the NOx emissions produced, bio-fuels have been shown to emit up to 30% more NOx than mineral diesel.

It perhaps illustrates how confused government policy has become. The same legislation includes provision for additional charges in 2019 for the Advanced (Development) Fuel mandate and the Greenhouse Gas (GHG) obligation to be incorporated in liquid fuel costs. The latter could potentially be used as a framework to monitor actual levels of electricity used to provide transport fuel, whether during production or at the point of vehicle charging, and therefore as the basis for a new taxation regime.

In the near term, apart from absorbing the additional direct costs, users may have to modify fuel storage and supply systems to adjust for the higher bio content. Bio-fuel is more likely to increase the possibility of mould growth in storage tanks, so a more rigorous housekeeping approach may be needed. Additionally, bio-fuel has been observed to be more aggressive to seals, etc. in fuel lines, so regularly checking for leaks will be essential.

For more fleet fuel management advice, get in touch with our fuel specialists today.

Article by: Duncan Rogers

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