HSBC launches £15bn SME fund amid cost of living crisis with £3bn available in London
HSBC has launched a £15bn fund dedicated to financing the survival and expansion of small and medium-sized enterprises (SMEs) across the country.
The £15bn fund, which equals the largest SME fund HSBC has launched, is available to businesses across the country, with £3bn put aside for SMEs in London.
Across sectors, £2bn will be allocated for SMEs trading internationally while £1.2bn has been put aside for agriculture. An additional £500m each has been earmarked for the tech sector and franchise businesses.
Head of business banking at HSBC UK Peter McIntyre told City A.M. the fund will finance a wide range of different activities to reflect the different needs of SMEs.
“There are those SMEs who have come through Covid and want to know what’s available to them from the point of view of working capital… But the other side of that is those businesses that have come through the other side [of the pandemic] and see the opportunity to invest, to differentiate themselves and to grow,” McIntyre said.
He said many firms see “a real opportunity” to grow, whether that be overseas or domestically, given the “incredible resilience” of consumer spending.
Alongside the fund, HSBC released new research which showed that 36 per cent of UK businesses plan to adapt their strategies over the new six months, reflecting the challenging economic environment.
One in five (22 per cent) firms felt that the current environment was having a worse impact on their business than the pandemic. The two most prominent issues affecting businesses were rising energy bills and travel costs, affecting 77 per cent and 76 per cent of businesses respectively.
McIntyre argued that SMEs have been “incredibly” resilient in the face of a difficult economic environment.
The launch of the fund comes shortly after research showed that major high street banks were stepping back from SME funding. According to fintech firm Iwoca, 77 per cent of brokers reported that high street banks are reducing their appetite to fund SMEs.
The data also showed just under 40 per cent of brokers have seen an increase in applications for funding being rejected over the last quarter.
But McIntyre argued HSBC was not pulling back from lending. “Our lending in the SME market is up on the prior year,” he said.
“We’ve done everything that we can and continue to be proactive in our outreach to those that see signs of financial vulnerability,” McIntyre continued.