HSBC £500m Investment in UK Tech SMEs

The multinational bank HSBC is set to invest £500 million into the UK tech sector. This will be accomplished through its 2022 £15 billion lending fund set up for small to medium-sized businesses (SMEs). The dedicated Green SME Fund will be available for businesses with a turnover of less than £25 million and will offer a 1 per cent cashback on loans. The fund will be aimed at developing these SMEs and helping them to invest in green activities.

This announcement follows the bank’s previously stated global commitment to provide between £560 billion to just over £800 billion of financing and investment to support its customers over the next ten years. HSBC’s £15 billion lending fund will be joined by:

  • The £250 million Grow Lending Fund aimed at high-growth tech businesses to help them scale and grow.
  • A further £2 billion for internationally trading businesses, £1.2 billion for agriculture and £500 million for franchise businesses.
  • A support programme which was unveiled last month for funding female entrepreneurs.

The Importance of Investing in SMEs

According to FSB, SMEs represent three-fifths of UK employment. Liz Barclay, a small business commissioner, said, “Small firms are the lifeblood of the economy, and they must be paid fast and fair, and if they are to have the confidence to invest and build the resilience, they’ll need to weather the storms ahead and they will need the support of funds like this more than ever.”

Whilst supporting this notion, Ian Stuart – chief executive of HSBC UK – also makes clear within his statements the importance of investing in SMEs to support the green and sustainable finance market. He said, “Companies of all sizes and sectors have a role to play in the journey to net-zero, however, the sustainable finance market has predominantly focused on larger corporations.”

“It’s critical that access to funds isn’t a barrier for small and medium-sized businesses working to achieve lower carbon emissions.”

Other platforms are also making a move to invest in SMEs and emphasise the importance of doing so. British Business Investments has announced a £5 million commitment to green economy investor Green Angel Syndicate (GAS). GAS is one of the largest angel syndicates in the UK, and the only one that specialises in the fight against Climate Change.

GAS has already attracted over 300 members and invested in 28 start-up companies across 10 different economic sectors.

The funding of GAS by British Business Investments will support early-stage UK businesses operating in the green technology sector.

HSBC and the Importance of SME Investment

HSBC’s annual SME fund has lent over £90 billion since 2014. Recipients of the fund include Eco Charger in 2021, an electric quad bike start-up from North Devon. This allowed the company to increase production and investment in its supply chain, enabling Eco Charger to expand overseas to America and Australia. Built to meet green credentials, its vehicles now operate in numerous global sectors, including eco-tourism, farming, and public services.

The investment in Eco Charger demonstrates how HSBC’s funding can aid UK SMEs to expand and flourish on a global scale.

“This extra funding builds on the support available through government schemes like Help to Grow and Start Up Loans to help small businesses grow and reach their full potential,” said Paul Scully, a small business minister.

The motivations behind HSBC’s investment ideologies were clarified by Peter McIntyre, whose statements highlight the importance of the banking giant’s SME fund. “We want to make a significant contribution to economies across the country, driving employment, local wealth and growth by providing funding, when and where it’s needed most,” McIntyre stated.