HSBC cuts loan rates for businesses that hire

One financial services provider has pledged to cut rates for small business bank accounts that can prove they have taken on additional staff.

HSBC has decided to slash its rates for small businesses that have hired within the past six months.  In an effort to reward these firms for their recruiting efforts, business loan rates have been lowered by as much as 3 percentage points.

For those HSBC customers that can demonstrate that they hired more than two new staff during the six month period, the bank will cut their loan interest rates accordingly.  As the current rate on small business loans up to £25,000 stand at 7.9 per cent, businesses qualifying for the rate cut can benefit from a new 4.9 per cent repayment rate.

HSBC has pledged to reduce their rates by one percentage point for just one new hire.  This can be either a part time worker or an apprentice, as long as the new hire is not an immediate family member – and when the firm hires an additional second staff member, the bank will raise the rate cut by another percentage point.

HSBC business banking head for the UK, Huw Morgan, stated that the bank has introduced the new programme to act as a reward for small businesses who are contributing to the economic recovery by hiring on additional staff.

Businesses wishing to qualify for the new loan will need to provide one of two tax forms in regards to their new hires to HSBC.  Once the business submits either the P45 of P46 form to the bank, only a £100 arrangement fee stands in the way of a reduced interest rate.

Many small business organisations have applauded the move from HSBC, with the hopes that such a new scheme will be adopted across the industry.

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