Are EOTs the way ahead for business in these testing times?

WITH all the headlines surfacing about the ‘uncertain’, ‘tumultuous’ and even ‘dangerous’ year ahead for UK businesses, it’s easy to get lost in the doom and gloom and resign yourself to battening down the hatches, sticking to the status quo and hoping for the best.

It’s important to remember that it is precisely at times like these that the opportunities for growth and innovation are ripe for the taking. Businesses still need funding and decisions still need to be made.

Employee ownership is one of these opportunities.

As demonstrated by its name, an employee-owned business is run by its employees – everyone has a meaningful stake in the business and its subsequent successes.

The UK is undoubtedly leading the way for innovation by seizing employee-owned business models to drive both economic and community development.

This model is proving that the precedent set by John Lewis isn’t unique but a new standard that UK businesses should follow – because it works.

There are also numerous benefits to employee ownership; employee ownership trusts (EOTs) are a tax-efficient vehicle for employers and employees alike.

They provide a positive solution for four key business conditions: succession planning, growth planning, start-ups, and public sector spin-outs. Combining an extensive knowledge of SMEs and the credit space, alternative lenders can tailor each EOT to each individual business, instead of shoehorning SMEs into an invoice financing structure.

For example, succession planning. An EOT gives employees not only security, it ensures the company’s legacy will remain firmly rooted within the community. The profits, too, are more widely spread, which is crucial to the development of the local community.

With the list of UK businesses moving over to employee ownership structures growing, it’s important for businesses in the Midlands to not be left behind.

Businesses should be aware of the benefits of employee-ownership as such arrangements offer a new means of ensuring productivity post-Brexit through reinvestment into regional communities.

Alternative lenders want to provide options for regional SMEs and boost local economies – we don’t take deals, we make them.

Geraint Regan is Director, Regional Business Development at ThinCats Geraint.Regan@thincats.com