The UK’s largest bank HSBC has set aside £8 billion to increase funding for small and medium-sized enterprises (SMEs) in around 43 areas of the UK.
Not only has the potential loan offering increased, but new business customers will also receive 18 months of free banking.
HSBC’s Head of UK Commercial Banking Ian Stuart, says he’s seen a pick-up in business applications in the past year. HSBC have over one million small to medium-sized business customers and approximately only 85% of their applications are approved.
In order to help lenders save hundreds, existing loans between 1,000 and 300,000 pounds will be abandoned or refunded right through till the end of July.
Phillip Brennan, head of businesscomparison.com says
According to the BBA, £29.2 billion of new SME borrowing was approved throughout 2014. So if HSBC are to lend £8 billion on top of its current lending book – that alone – will increase lending by 27%!
Of course, a significant percentage of this lending will be going to “prime” customers who already have access to credit so it may not increase lending significantly but rather it will increase competition. HSBC removing fees hopefully will be a trend to be followed by other high street lenders.
We have seen a lot of alternative lenders entering the market if high street banks are now back in the market the next 12 months will be very exciting.
HSBC are reassuring SMEs in Britain and hopefully securing their growth by introducing such simple actions such as removing the fees and charges, and most importantly increasing their funds for SME loans.