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Q & A

Small business loans: Q&A with Richard Bearman

Richard Bearman, Head of Business Banking HSBC UK, on Small Business Loans

How could a small business loan help my small business?

Richard Bearman (RB):Small business loans are used for a huge variety of reasons, but normally they’re used to take advantage of an opportunity and enable growth. A start-up or more established business might use a small business loan to buy machinery or equipment or to improve premises or develop new products. There are many other reasons.”

When might a small business loan be more suitable that other finance options?

RB: “Businesses usually require a blend of debt finance solutions. It’s a matter of aligning one with what you’re buying and your financial circumstances. Providing you pay back the money you borrow before month end, business credit cards can be used for less expensive, day-to-day purchases, while an overdraft can help with operating capital. But a bank business loan is better suited to buying higher value, long-term assets, although leasing or asset finance might be more suitable in some cases.”

How much could my small business expect to borrow from HSBC?

RB:Small Business Loans of £1,000 to £25,000 are available [7.4% APR Representative], with repayment terms ranging from between 12 months to five years. There are no charges for additional repayments, so you can repay sooner if you want. And you may be able to defer your first repayment for three months, although interest is charged throughout the term of the loan. Other bespoke HSBC loans can offer small business greater sums and or longer repayment periods.”

What are the approval rates on HSBC Small Business Loans?

RB: “Very high – we have a £10bn lending fund for small businesses, because we want to give them access to the money they need to succeed and grow. Most loan applications are approved for current and new customers. In 2016 we approved 91% of business lending up to £30k for start-ups and businesses that switched to us.”

How do I apply for an HSBC Small Business Loan?

RB: “There are various options. If you already have an HSBC business current account, you can pick up the phone and call 0800 587 0644 [lines open 8am to 10pm]. You can do it over the phone with one of our agents by using screen-share technology. If you already bank online with HSBC, you can log on and apply online. Should you prefer, you can meet with a Business Specialist in branch.”

Will I need an up-to-date business plan?

RB: “Having an up-to-date business plan is not a requirement when applying for a Small Business Loan, although I’d always advise small businesses have one, because it can be a tool that helps them to run their business more effectively. Creating or updating your business plan can also help you to identify how much money your business needs to borrow and explain how it will be spent.”

Will I be credit-checked?

RB: “Checks are carried out on those who don’t already bank with HSBC. If you’ve banked with us for a while and there haven’t been any credit history problems, approval is often given very quickly. Some applications will be declined straight away, while in other cases, we’ll speak to the loan applicant to find out more, to make sure they can afford to repay the debt, which is when having a business plan can help. If your business need less than £10,000, normally we don’t ask for personal guarantees for our Small Business Loans.”

  • Find out instantly if you’re likely to get a business loan from HSBC by using our Eligibility Checker.

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