Small business owner with an hour to spare? Why not apply for a loan?

Hayley Kirton
Follow Hayley
Barclays launched the app service after it noticed an increase in the number of people banking exclusively by mobile (Source: Getty)

Small business owners with an hour to spare can now use it to unlock some extra cash, thanks to a new service offered through Barclays' mobile banking app.

The lender has been running a trial version of the service, which allows small business owners to apply for loans up to £25,000, since last November. But from today, it is available in full to 260,000 customers.

Although Barclays might need to contact some clients for more details, the majority will receive the money from their loan in 60 minutes or less.

Ian Rand, chief executive of business banking at Barclays, told City A.M. the bank decided to launch the service after it noticed an increase in people exclusively using their phone to carry out their banking needs.

Read more: Spending on Small Business Saturday was up 15 per cent this year

"We've been surprised at how much of a difference putting pre-assessed lending limits on a mobile makes," Rand said of the trial results, adding the bank hoped to increase the lending limit in the future.

Research by Barclays, published to coincide with the service's full launch, found that almost a third (30 per cent) of small businesses have been put off applying for a loan, despite feeling it would help them grow.

Meanwhile, a quarter (24 per cent) think it will be harder to secure a loan in 2017, as Brexit uncertainty eats into banks' appetite for lending.

Read more: What the Autumn Statement meant for SMEs

For 86 per cent of those using the service during its trial period, it was the first time they were accessing financing.

Barclays estimates that making it easier for small businesses to access lending could unlock £34bn in economic growth by 2021 along with more than 190,000 jobs.

Related articles