Finance · 16 June 2017

New £10bn HSBC small business loans fund set to unlock UK exports

HSBC small business loans
The latest HSBC small business loans fund will target export growth for small firms

Entrepreneurs will soon have access to an HSBC small business loans fund worth £10bn, after the lender announced a range of new offers for UK founders. 

HSBC has promised the fund would be “truly UK-wide”, emphasising opportunities for firms across England, Scotland, Wales and Northern Ireland.

The lender broke down some its regional finance pledges:

  • Wales: £500m
  • Northern Ireland: £100m
  • North West of England: £900m
  • East of England: £925m
  • South West of England: £700m
  • South East of England: £1.275bn

According to the bank’s approval figures, nine in ten loan applications were successful in 2016, and Ian Stuart, HSBC’s UK CEO, said the latest £10bn fund “reaffirms our commitment to support the growth of UK SMEs of all sizes, from startups to established businesses”.

The new lending package from HSBC will specially look to bolster the exporting capabilities of small business owners.

New research from the bank revealed a misconception among new entrepreneurs that only long-established businesses could be successful exporters.

The main barrier to growth for three-quarters of survey respondents was a lack of international business experience. However, over a third of small exporters banking with HSBC began selling overseas within the first year of trading.

Stuart cited data from the Federation of Small Businesses (FSB) that suggested the right support could double the one in five small firms currently exporting.

Amanda Murphy, HSBC’s head of commercial banking, said better finance opportunities would meet the appetite of founders to “grow their business through exporting”.

“HSBC can provide access to new trading networks for businesses of all sizes, help them to understand how they can consider exporting with confidence, and has the expertise to help businesses navigate change by being responsive, flexible and nimble.”

HSBC has looked to court a new wave of small business customers with the extensive new offering, including an 18-month free banking deal for new clients, and practical services such as a text alert for informal overdraft fees and interests.

HSBC small business loans application process

Business Advice spoke to HSBC’s head of business banking, James Cliffe, to find out what entrepreneurs can expect from the lender’s application process.

“They can expect us to ask them about the risks within the business and the plans they’ve got to mitigate those. How achievable growth rates are, for example.

“If we graph a set of projections that look like a hockey stick, the customer has got to be able to explain and justify where they are getting the growth rates from,” he said.

Cliffe explained what would set alarm bells ringing for an HSBC loans adviser.

“Crucially, being unable to substantiate claims in business plans. Widely optimistic forecasts, lack of relevant experience and track record, for example. And people that aren’t open with us, if we feel somebody is holding back information,” he said.

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Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.