Wednesday 10 March 2021 12:01 am

HSBC launches £15bn lending fund for British SMEs

HSBC has today launched a new £15bn fund to help UK SMEs through the economic recovery.

The fund, which includes over £10bn of regionally focussed allocations, seeks to move away from the “traditional” London focus and drive growth in regions across the country.

“The past 12 months have highlighted the challenges many small businesses face. The issue of late payment and pressure on cash flow is more prevalent now due to the continued impact of the pandemic,” interim small business commissioner Philip King, said.

“SMEs are the backbone of the economy and initiatives such as the lending fund will help more businesses to access finance and support business recovery post COVID-19.”

Businesses that trade internationally will have access to a ‘ring-fenced’ pot of £2bn, while a £1.2bn fund will be open to the agriculture sector, as well as two new additional funds for tech and franchise businesses both worth £500m.

It comes just a week after the Chancellor Rishi Sunak announced plans for recovery loans administered by the British Business Bank. Similar to the emergency schemes launched last year, the Recovery Loan Scheme, which has a maximum facility of £10m, will offer a government-backed guarantee on loans.

HSBC’s own offering looks to serve the smaller end of the market for businesses not covered by HSBC’s larger loans, starting with loans of £1,000.

The bank says the £15bn fund has been designed to boost and expand UK businesses internationally, meanwhile supporting key sectors in specific regions to drive investments, as the country bares the brunt of the pandemic and Brexit.

Head of small business banking at HSBC UK, Peter McIntyre, said: “We’ve helped British business get through the last year with over £14bn of Covid-19 lending support. Now it’s time to turn our minds to what comes next and how we help companies grow again, opening up a world of opportunity and contributing towards a sustainable future society.”

Nearly two thirds of British businesses propose to increase investment in their businesses in the next year, research by the bank found. Meanwhile, 71 per cent expect to have returned to pre-pandemic profit levels by the end of 2022.

“This extra finance from HSBC will help small businesses not only prepare for reopening, but to try new ideas and build back better from the pandemic, complementing the unprecedented support available from the government,” small business minister Paul Scully said.