According to the latest research, small business owners are increasing the amount of cash they’re holding in current accounts ahead of Brexit.
The Hampshire Trust Bank (HTB) surveyed 500 companies whose turnovers ranged from below £500,000 to £100 million.
The research found that since the announcement of the UK’s plan to leave the European Union (EU), business owners have increased the amount of money in their current accounts by 78 per cent in case of another credit crunch.
Owners are putting money aside to pay off loans in the event of a post-Brexit recession and give them a cushion to cope with any unforeseen issues that develop following the uncertainty over Brexit negotiations.
Entrepreneurs are also taking measures to give them access to funds should any investment opportunities arise after leaving the EU.
Many businesses began stockpiling raw materials ahead of the original Brexit deadline back in March and have started doing so again before the new deadline at the end of next month.
Experts believe the need for accessible cash to buy supplies for stockpiling has contributed significantly to the increase of current account balances.
The report claims that the average business current account balance is now £726,000 compared to £408,000 two years ago, with the use of overdrafts falling from an average of £56,000 to £49,000.
Emma Jones, the founder of Enterprise Nation, said: “At times of uncertainty, small business owners want to know they have cash in the bank.
“Conserving cash is putting off key decisions such as hiring staff and buying new equipment, but just imagine the economic bounce we’ll see when the position on Brexit is clear and money starts flowing again.”