This month HSBC launched an £8billion fund which will specifically help finance the UK’s small and medium-sized enterprises (SMEs).
The bank has said that the pot of cash will be a major help to those looking to start a new business, with financial support also available for existing companies. The fund will be allocated in 43 tranches nationwide.
London is set to get the lion’s share of the funding; £2.1billion will be allocating to support the capital’s smaller firms.
Birmingham, Manchester, West Yorkshire and Scotland may not receive a sum on quite that scale, but can nonetheless look forward to a handsome £400million each.
James Cliffe, HSBC’s head of business banking, said the increased risk of lending to start-ups ‘would not preclude’ the bank from offering help.
“If we are presented with a viable proposition, and we have confidence in the management and the cash flow projections, then yes, we will fund it,” he said.
“What it comes down to is having demonstrable cash flow because we lend against cash flow. What we aren’t is equity providers and equity providers will lend against a concept or an idea and a concept or an idea doesn’t have a proven cash flow.
“So if people have equity needs they should be talking to business angels or a start-up loan company that the government has backed. We as a high street bank can support businesses with demonstrable cash flow and help them grow.”
The fund has been announced at a time when politicians are being urged to make sure that SMEs can access the finance they need over the course of this Parliament.
Many believe that new Business Secretary Sajid Javid will have a hard time following his Liberal Democrat predecessor Vince Cable, who was widely praised for his work supporting smaller firms.