HSBC pledges £10 billion in small business loans
(21 April 2016 – United Kingdom) HSBC has announced its largest funding package for small and medium sized companies in the UK.
The bank has said it will commit over £10 billion (A$18.3 billion) in loans to sector this year. The figure surpassed the £8 billion it pledged in 2015.
HSBC is also fixing the fees that businesses pay to use their bank accounts to £5.50 a month for a year, in an attempt to retain and entice business customers.
The move comes as large high-street lenders start to return to small business lending after retreating in the wake of the financial crisis.
The proportion of loans that banks approved for small and medium-sized businesses increased for the fourth consecutive quarter in the first three months of this year, according to a survey by the Bank of England.
It shows that banks believe demand from SMEs to increase in the second quarter.
Ian Stuart, head of commercial banking in the UK at HSBC, said small business will still need access to funding.
“Businesses will continue to operate either way, whether you’re a tax operator or a corner shop, you will still be trading after June,” he said. He said the bank has not seen any drop off in appetite so far this year.
Seemingly in a response to challenger banks, better known as “fintechs” that provide fast loan approval s, HSBC has launched an online tool offering potential customers a credit decision for loans of up to £30,000 in less than two minutes.
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