HSBC backs SMEs with £1 billion fund

by Gill Montia

Story link: HSBC backs SMEs with £1 billion fund

HSBC has announced that it will make £1 billion available to small UK businesses that are financially sound but struggling with cash flow problems in the economic downturn.

The bank’s head of commercial, Noel Quinn, says the money will be made available to existing customers to help with their working capital needs and will be priced according to risk.

The £1 billion forms part of a £3.4 billion global fund set up by HSBC with an initial focus of providing working capital in the UK and Hong Kong.

Meanwhile, government ministers continue to put pressure on High Street banks to restore lending to individuals and firms.

Business Secretary, Lord Mandelson, is developing a new code of practice on lending and it is understood that banks could face legal action if they fail to follow the guidance.

RBS has already responded by freezing overdraft charges for small and medium sized enterprises from the beginning of this month and promising not to withdraw existing overdraft facilities.

NatWest has followed the lead of its parent meaning over one million small business customers could benefit.