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HSBC LAUNCHES £1.4BN SME FUND


As Carol Bagnald, HSBC Regional Commercial Director for London, announced at the recent CEW Beauty Awards lunch, HSBC has just launched an SME fund, allocating £1.4bn for London firms in new lending to help businesses achieve their growth plans. They would be delighted to discuss with entrepreneurial beauty brands how they might be able to allocate some of these funds to you!

If you would like to find out more please contact one of the following :

Pam Hogan, International Business Manager, HSBC Commercial Banking - pam.hogan@hsbc.com 

Vicky Stringer, International Commercial Manager, Oxford Circus - victoria.stringer@hsbc.com 

Lucy Wynn, Deputy Area Commercial Director, South East London - lucywynn@hsbc.com 

Clare Stanley, Deputy Area Commercial Director, West End - clarestanley@hsbc.com 

2014 will mark a turning point for ambitious London businesses, as they look to capitalise on the UK economic recovery to invest in growth, so finds HSBC’s new ‘Business of Growth’ report released today.

The report highlights the constant upwards revision of GDP growth over the last 12 months, the UK economy’s outperformance of the Eurozone and a rise of business confidence as providing the perfect conditions for growth. It has identified Britain’s business growth potential for 2014 by incorporating analysis of 39 separate forecasts of GDP and investment, as well as the findings of four leading business barometers.

The ‘Business of Growth’ predicts an increase in fixed investment – physical assets including machinery, premises and stock – of 7.1% in 20141. This compares to a pre-recession average annual investment growth of 3.6%. This figure has also been revised significantly upwards in recent months, marking increased confidence in the recovery. In March 2013, forecasts for fixed investment stood at just 4.7% for 2014.

This analysis is supported both by HSBC’s own experience, where new term lending is up 16% year on year and the overall value of lending that is being approved is even higher, at 37% over the same period2.

HSBC says that a significant amount of the lending it is providing its small to medium-sized enterprise (SME) customers is clearly earmarked to support growth. It points to a number of strategies that businesses are adopting, including investing in new equipment to grow production capacity, smoothing out supply chains and payments cycle with working capital solutions, expanding into new markets (especially in emerging Asia) and purchasing new premises.

Carol Bagnald, HSBC Regional Commercial Director for London, said: “There is a marked change in business confidence across London, but what is most noticeable is the pace of change.  Businesses are gearing up more than ever to diversify and expand and this change is reflected in our uplift in lending.

“We’re seeing more businesses from overseas establishing a presence in London for the first time, and existing businesses expanding and developing their operations across the capital and the UK.   Businesses are not simply looking for growth, they’re looking to compete, and this is more acutely felt in London where the pace of change has significantly increased.

“From manufacturing through to service industries, there has been a lot of anticipation and expectation, and we’re now seeing commitment.  Businesses are taking a longer-term view and talking to us about how they can achieve their growth ambitions, whether it’s support for the purchase of premises or equipment, or the hiring of staff to improve performance. 

“The businesses that are growing fastest are those that are innovating, and continually reviewing their business model and seeing what they can do better, particularly in the retail sector where shifts in e-commerce are so fast paced.

“The opportunities lie in having the knowledge of what can be achieved, and looking beyond what has traditionally been done.  We have been using our understanding of our customers’ business models and trade cycles to structure their finance in a way which strengthens their foundations, and allows them to capitalise on the growth opportunities that are out there.”

Amanda Murphy, Head of Business Banking for HSBC, said: “Ambitious British businesses are saying they are going to invest this year and get on with growing. We want to support their ambitions by significantly increasing our net lending to businesses this year. We are helping more than 6,100 businesses start up every month, and want to support our hard working SME business owners on their drive for growth.”

In response to this shift, HSBC is making almost £6 billion of new lending available across its regional network, individually allocated to all of its 52 local business centres to help get finance directly to businesses where they need it right across the UK, with £1.4 billion allocated for London SMEs.

Amanda Murphy said: “Business growth will come from all of our regions and by breaking down funds to a very local level we are confident we can help make a real difference. We have put the funds into the hands of our local relationship managers to empower them to identify and work with ambitious companies in their area.” 

Sustained recovery

Despite the slow emergence from the global downturn, the UK economy is now six to nine months into strong, sustained recovery. The ‘Business of Growth’ report’s analysis identifies that there is a unanimous positive consensus among leading independent forecasters for a substantial pick-up in economic growth in the next two years.

It indicates an average in forecasted GDP growth for 2014 of 2.7% – its highest level since 2007. These forecasts have also been repeatedly revised upwards over the last 12 months, reflecting an increasingly positive consensus view on the strength of the recovery. The IMF, for instance, significantly raised its 2014 GDP growth forecast last week to 2.9%, predicting that the UK will be the fastest growing economy in the G7 this year. HSBC’s own latest GDP growth forecast is also 2.9%3.

Meanwhile in 2013, the UK outperformed most European economies, and employment recently rose to its highest level in five years.

Ambitions for Growth

The HSBC report also analyses the latest investment intentions data from three leading business confidence barometers – the ICAEW Business Confidence Monitor, the FSB Voice of Small Business Survey and the Bank of England Agents’ Summary of Economic Conditions – and also looks at HSBC-backed research, including the Trade Confidence Index. All identify uplift in businesses’ confidence and intentions to increase capital investments.

New HSBC Support for Growth Businesses

To enable more businesses to invest for growth, HSBC has allocated individual funds to all of its 52 local business centres, which will make available almost £6 billion of new finance. The funds will be open to new and existing UK domiciled businesses with turnover of up to £30m4.

The funds are just one part of HSBC’s ‘Ambitious Businesses’ programme to help find and support forward-thinking companies that are looking to grow. To support SMEs right across the UK, the bank will also:

  • Host 100 ‘Access to Finance’ workshops, to help small companies maximise their chances of securing funding  
  • Hold over 50 ‘Fast Lane to Growth’ events across the UK, sharing strategies to accelerate growth and enter new markets;  
  • Hold five ‘Business Thinking’ thought leadership events where the UK’s best business leaders will share their secrets to success. 

Footnotes:

1Fixed investments include both business and government investment spending. In 2013, real-terms business investment was 57% of total GFCF.

 2This is for the 2 months to February 2014.

 3HSBC Global Economics Quarterly, 20 March 2014.

 4Lending is subject to status and terms and conditions apply. 

Ends

For updates from the HSBC Press Office, follow us on Twitter: www.twitter.com/HSBC_Press.

Notes to Editors:

The HSBC Group

HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 6,300 offices in 75 countries and territories in Europe, Hong Kong, Rest of Asia-Pacific, North and Latin America, and the Middle East and North Africa. With assets of US$2,671bn at 31 December 2013, the HSBC Group is one of the world’s largest banking and financial services organisations.

HSBC Commercial Banking

For nearly 150 years we have been where the growth is, connecting customers to opportunities. Today, HSBC Commercial Banking serves businesses ranging from small enterprises to large multinationals in over 60 developed and faster-growing markets around the world. Whether it is working capital, trade finance or payments and cash management solutions, we provide the tools and expertise that businesses need to thrive. With a network covering three quarters of global commerce, we make HSBC the world’s leading international trade and business bank.

For more information see www.hsbc.com/1/2/business-and-commercial