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HSBC’s £500m boost for franchise businesses

Written by Andy Swales on Friday, 12 March 2021. Posted in Franchise

With SMEs planning for the future, HSBC makes huge financial commitment to UK business owners.

HSBC’s £500m boost for franchise businesses

With SMEs planning for the future, HSBC makes huge financial commitment to UK business owners.

As the nation’s businesses seek to rebound from the ongoing Covid-19 health crisis, banking giant HSBC has stepped forward to boost the UK’s franchising industry by launching an unprecedented £500m fund. This significant financial package is part of a broader £15 billion lending fund, aimed at bolstering the UK economy by supporting small and medium-sized enterprises (SMEs) across the country.

The UK arm of HSBC made the announcement earlier this week as part of its commitment to helping businesses innovate and grow over the coming months and years. Andy Brattesani, Head of Franchise at HSBC UK, said: “Last year (2020) was difficult 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, while opportunities in franchising are varied. Our £500 million fund will help businesses to develop, grow and drive investment.” Franchising numbers are at a record high in the UK, driven by the rise in younger people wishing to run their own businesses, as well as existing franchisees expanding across sectors.

The franchising industry has reached record numbers, employing over 700,000 people and contributing an estimated £17bn to the UK economy, according to figures published by the British Franchise Association (BFA).

And this recent pledge from HSBC should certainly assist economic recovery in the UK, with Andy Brattesani adding: “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. Therefore, we’re providing funding just when they need it the most. It will help to support future growth opportunities and that is exactly what this fund intends to achieve.”

Despite the current challenging economic environment, research undertaken by HSBC shows that 62% of UK companies intend to increase investment in their businesses over the next year. This study highlights that investment is likely to focus on four fundamental areas: employee well-being; customer experience; cash flow/capital management; and security.

And there appears to be good news just around the corner, with almost three-quarters (71%) of UK businesses expecting to return to pre-pandemic levels of profitability by the end of 2022. Nearly half of the companies surveyed (49%) are also projecting sales growth by the end of the current year.

Pip Wilkins, CEO of the British Franchise Association, is also optimistic about the immediate economic future, saying: “Through every downturn franchising has continued to hold a solid share in the market. We have seen networks unite and use collective resources to survive the impact of the pandemic. Many are now stronger businesses as a result.

“However, the industry would not be where it is today without funding institutions such as HSBC UK. This £500 million 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 2014, HSBC has lent more than £75 billion to UK SMEs as part of its commitment to helping British businesses innovate, evolve and grow. Andy Brattesani went on: “We remain committed to supporting the needs of our small business customers and have lent over £14 billion during the pandemic so far.”

He is hoping this latest announcement from HSBC will give existing business owners, as well as those keen on joining the franchising industry, confidence for the future: “While it requires training and supporting of franchisees, franchising 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.

“Franchisees benefit from a central helpdesk, offering advice and liaison with local bank managers. Funding of up to 70% of start-up costs is available for those franchisees joining an established network.”

HSBC would like to remind readers that their Tomorrow Ready online resource hub is available to help businesses ‘adapt for today, while preparing for the future’. This hub provides insights and resources, with advice on topics such as cash flow and management skills, with visitors able to listen to webinars and read articles.

About HSBC UK:

HSBC serve approximately 14.5m customers across the UK, supported by 32,000 colleagues. They offer a complete range of retail banking and wealth management to customers, as well as commercial banking facilities for companies of all types – whether small or medium sizes businesses (SMEs), or large corporations.

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About the Author

Andy Swales

A dedicated journalist for three decades, Andy has spent much of this time working for ITN, Sky Sports and Today’s Golfer magazine, after starting out years back at the Hackney Gazette. Since leaving Sky Sports in 2018, has spread his wings into other areas and loves writing about property and the nations rising stars in the SME business world and franchise community.

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