HSBC is one of the world’s largest banking and financial services organisations and it serves millions of customers worldwide. The bank was founded in 1836 to facilitate trade between Europe and Asia.
HSBC has a high rate of approval for business lending (93% for loans up to £30,000, as of 2017) and says it is committed to helping British businesses take the first necessary steps to scale the ladder of success. If you need a loan, you can apply via the HSBC site.
HSBC small business loans
HSBC offers fixed rate loans for small businesses looking to borrow up to £25,000, with loan terms between 1 and 10 years. HSBC small business loans have a representative APR of 7.1% for loans between £1,000 and £25,000.
As an accredited lender under the Bounce Back Loan Scheme, HSBC also offers small business loans from £2,000 to £50,000 to businesses affected by the coronavirus pandemic. BBLS loans are provided with a fixed rate of 2.5% p.a.
HSBC business overdraft
If you already have an HSBC Business Current Account, you can borrow money without needing to use security (subject to approval) by using a business overdraft. The interest rate you receive will be linked to the Bank of England base rate. Learn more about business banking.
What other business finance products does HSBC offer?
Fixed and variable rate loans A fixed rate loan means you’re protected from increases in interest rates, and can budget with certainty, while a variable rate exposes you to potential increases in interest rates, but could also mean you benefit from any reductions in rates. See HSBC’s current deals or compare fixed rate deals from multiple lenders.
Business credit cards Need a small, ongoing, flexible line of credit? An HSBC business credit cards could do the trick. Check out our review or compare all business credit cards.
HSBC small business loans have a 7.1% representative APR on loans between £1,000 and £25,000, but the interest rate you receive will vary based on your business’ application and financial situation, as well as the size and length of your loan.
HSBC business overdrafts have a variable representative EAR of 10.36%, with overdraft facility offered with at least a 4% margin over the Bank of England base rate.
Am I eligible for a HSBC business loan?
You should only apply for a HSBC business loan if you’re certain you can meet the repayment terms.
Here are the criteria that you will personally need to meet in order to be eligible for an HSBC Small Business Loan:
UK resident for at least three years
Over 18 years old
Good credit rating without a history of county court judgments or bankruptcy
Information HSBC will need to process your loan application
HSBC will need to know the following:
A full rundown of how your business operates
How your particular skills and experience will help you achieve your goals
Information on how the money you want to borrow fits into your larger goals
The period over which you want to borrow your money
Proof the bank will need to see to approve your application
Security/assets. It will often need to see security in the form of guarantees, property or other types of assets that are easy to value.
Other business interests. It will need to see how many other commitments you and your business will have in order to ensure that you can dedicate the appropriate amount of time in order to grow it properly and make your loan repayments.
Cash flow forecast. You need to be able to prove that you have a logical and well thought out business strategy and model.
Financial accounts. The bank will need to see evidence of your past financial history.
HSBC states that its business loans should not be used for anything other than the purpose of investing in your business. Absolutely no personal purchases are allowed.
What can’t HSBC do?
Looking for something else? Outside of the HSBC services listed above, you could also consider the following finance products for your business.
Merchant cash advance
Get a lump sum upfront to repay in-line with volume of future sales. Compare deals and learn how business cash advances work.
Yes. If you’re held back by being unable to offer security for a loan, then under this scheme the government effectively acts as your guarantor for 75% of the loan. This doesn’t mean your company isn’t liable (standard procedures will be undertaken by HSBC before turning to the government to recover unpaid funds) but it can help to get applications across the line, or help your business to access larger loans than it might alone.
Chris Lilly is a publisher at finder.com. He's a specialist in credit-based products including business and personal loans, mortgages and credit cards, and is passionate about helping UK consumers make informed decisions about their borrowing. In his spare time Chris likes forcing his kids to exercise more.
Business loan statisticsBusinesses all over the UK face financial instability daily, which often requires outside funding. We have looked into how the state of borrowing for these businesses differs between the industry, over the years, and for the size of the business.
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