Banking giant HSBC has unveiled a record £15 billion lending fund for Britain’s small businesses to help spur on their recovery from the pandemic.
The group said two-thirds of this year’s fund, its biggest ever for SMEs, will be allocated to specific regions to ensure companies throughout the UK are able to benefit.
It will also include a £2 billion ring-fenced pot for firms trading overseas, as well as £1.2 billion for those in the agricultural sector and – for the first time -allocations for technology firms and franchise businesses, at £500 million each.
HSBC said it hopes the fund will allow small businesses to capitalise on the rebound once lockdown ends, and help support Britain’s wider economic recovery.
Recent research carried out by the bank showed nearly two-thirds – 62% – of companies plan to boost investment in their business over the next year.
It also found that nearly half of British companies (49%) are expecting sales to grow and almost three-quarters (71%) aim to have returned to pre-pandemic profit levels by the end of 2022 – and a fifth by the end of this year.
Details of the fund come as many small and medium-sized firms (SMEs) are facing a cash flow crisis, especially in sectors that have been badly hit by the latest lockdown, such as retail and hospitality.
The banking industry and Government have sought to help many through the crisis with emergency support measures, but attention is now turning to the recovery phase and financing to help them get back on the path to growth.
Peter McIntyre, head of small business banking at HSBC UK, said: “We’ve helped British business get through the last year with over £14 billion 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.
“The £15 billion fund will help businesses to expand internationally and here in the UK, support key sectors and drive investment across regions.”
Philip King, interim small business commissioner, 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.”
Since launching the small business fund in 2014, HSBC has lent more than £75 billion to UK SMEs – with over £14 billion lent alone during the pandemic so far.
Small business minister Paul Scully said: “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.”
