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08 Mar 2021

Major British Bank Launches New £500M SME Fund To Support Franchise Businesses

Major British Bank Launches New £500M SME Fund To Support Franchise Businesses
HSBC UK has today launched its first ever £500 million fund for franchise businesses as part of its commitment to help British businesses innovate and grow as the country looks to rebound from the Covid-19 health crisis. The fund is part of a broader £15 billion lending fund to support small and medium-sized enterprises (SMEs) across the UK.

Franchising numbers are at a record high in the UK, driven by the rise in younger people wishing to run their own businesses and by existing franchisees expanding across sectors, from major food brands and coffee bars, healthcare and phone shops. Franchising has hit record numbers, employing over 700,000 people and contributing an estimated £17bn to the UK economy according to the British Franchise Association (bfa).

Despite the challenging economic environment, 62% of UK businesses intend to increase investment in their business in the next year, according to research from HSBC, with the focus on four fundamental areas of their business in 2021; employee well-being, customer experience, cash flow/capital management and security.

Almost three quarters (71%) of UK businesses expect to have returned to pre-pandemic levels of profitability by the end of 2022 and a fifth by the end of this year and nearly half of British companies (49%) are projecting sales growth. 

With UK businesses looking at how they can expand, franchising is the third option to consider alongside organic growth and aquistion. While it requires training and supporting franchisees, it is capital-efficient and lower-risk compared to other methods. For franchisees, the model offers a more accessible way of starting a business, using a tried and tested concept.

Our dedicated franchise team provides specialist knowledge and support focusing entirely on the industry.Franchisees benefit from a central helpdesk, offering advice and liaison with local banking managers. Funding of up to 70% of start-up costs is available for franchisees joining an established network.

Andy Brattesani, Head of Franchise, HSBC UK said: “2020 was a difficult year for businesses, with almost every sector impacted. Franchising is a great route towards expansion for an established, successful business looking to grow. Franchising hasn’t got the exposure it deserves, opportunities in franchising are varied. Our £500 million fund will help businesses to develop, grow and drive investment.

“We know our customers are innovating and adapting at pace and British businesses tell us that through these uncertain times they need their bank to be flexible, provide funding when they need it most and to support future growth opportunities and that is exactly what the Fund intends to achieve.” 

Pip Wilkins, CEO, British Franchise Association said: “Through every economic downturn franchising has continued to hold a solid share in the market. We have seen networks unite and use collective resources to survive impacts of the Pandemic, many are now stronger businesses as a result! However, the industry would not be where it is today without the funding institutions such as HSBC UK. The £500m SME fund for franchise businesses is a significant investment that will unlock the potential for thousands of people to grow in this diverse industry.” 

Since launching the SME Fund in 2014, HSBC has lent more than £75 billion to UK SMEs as part of its commitment to help British businesses innovate, evolve and grow. We remain committed to supporting the needs of our small business customers and have lent over £14bn during the pandemic so far.

Our Tomorrow Ready, online resource hub is also available to help businesses adapt for today, while preparing for the future. All businesses can access insights and resources to help them hone their cash flow management skills and view our programme of business events, webinars and articles to help them understand the implications of new ways of working, building resilience and exploring export opportunities.





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