One personal and business bank account provider has recently announced it has managed to hit its Project Merlin business loan target in 2011 for small and medium sized firms.
Retail banking giant HSBC, the bank that announced the accomplishment – is one of five High Street banks that signed up for Project Merlin, a scheme to entice lenders to increase the amount of finance provided to small businesses. All five banks reported that they collectively loaned £157.6 billion to businesses in the UK by the end of Q3 2011, setting the total £190 billion target for the year easily within their sights.
However, lending to small and medium sized businesses at that point in time stood only at £56 billion, which stood below the £76 billion target for the year, with SME industry leaders disputing the effectiveness of Project Merlin as loans became more expensive to service and more difficult to source, with the Federation of Small Businesses spokesman, Andrew Cave, made the argument that since the initiation of the project, small business financial conditions had actually gotten worse. Yet now HSBC has announced that it has exceeded its share of the target by providing nearly £39 billion in lending to business customers in the UK, providing nearly £12 billion in gross new lending facilities to SMEs.
HSBC said, in commenting about its 2012 targets, the bank has hopes to approve four out of every five small business applications while also looking for ways to increase its lending capacity. Jacques-Emmanuel Blanchet, HSBC’s commercial banking head, said that next year the bank will take steps to increase its support for small businesses looking to internationalise and grow across all regions and sectors.