Kristina Fox
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HSBC offers a few different lending products to businesses, including its fixed-rate Small Business loan, worth up to £25,000, and its fixed- or variable rate Flexible Business Loan, for borrowing over £25,001. There is even the potential to receive cashback on your loan if it is used for green projects.
However, you may not be able to repay your HSBC business loan in full before the end of the term without incurring fees and charges. And at £25,000, the maximum amount borrowable with a Small Business Loan is lower than many comparable products on the market.
HSBC Small Business Loan
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Representative APR7.1%Representative example for loans over £10,000
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Representative Example7.1% APR representative (fixed). Based on an assumed loan amount of £13,000 over 60 months at the AIR of 7.1% p.a (fixed). Monthly repayment £256.73. Total amount payable £15,404.01.
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Available amounts£1,000 – £25,000
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Available Terms1 – 10 years
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Key features
- Borrow up to £25,000 with a Small Business LoanThe HSBC Small Business Loan starts at £1,000 and goes up to £25,000. The Flexible Business Loan, meanwhile, is for borrowing over £25,001.
- Small Business Loan terms up to 10 yearsThe Small Business Loan term length can be between 12 months and 10 years, while the Flexible Business Loan can go up to 20 years.
- Capital repayment holidaysYou may be able to take a capital repayment holiday when you first get your Small or Flexible Business Loan, although this means you would pay more in interest overall.
- Green SME Cashback FundIf your business loan is for a green project, you may be eligible for cashback on the amount you borrow.
HSBC business loans pros & cons
Pros
- You can borrow up to £10,000 (HSBC Kinetic Small Business Loan), up to £25,000 (Small Business Loan) or a potentially larger loan depending on your business’s financial status (Flexible Business Loan).
- You can borrow over a term of up to 10 years (Small Business Loan and HSBC Kinetic Small Business Loan) or up to 20 years (Flexible Business Loan).
- Access to customer service is via the lender’s website, phone helpline and mobile app, as well as support in a branch.
- There is no arrangement fee for the HSBC Small Business Loan. However, arrangement fees may be payable with the Flexible Business Loan.
Cons
- The Small Business Loan has a lower maximum level of borrowing than comparable products from other traditional banks.
- Although you can make overpayments without a fee, you may have to pay an interest charge for early repayment in full (for the Small Business Loan), as well as a prepayment fee (for the Flexible Business Loan).
The pros and cons featured here are chosen by us based on a combination of our expert, research-based opinions and an exclusive survey of UK business owners and decision makers. The survey was conducted on behalf of NerdWallet UK in December 2022 to identify the business loans features that people feel are most important. They are unlikely to be the only product features and restrictions that you should consider. Pros and cons are subjective and you should align them to your own personal and business circumstances. Information was correct at the time of publication but may have changed since.
HSBC business loans full review
HSBC offers borrowing options for a range of business types and sizes, including for sole traders, limited companies and partnerships.
Generally, both new and existing HSBC customers can apply for an HSBC business loan, provided they meet the eligibility criteria for the borrowing solution they are applying for.
However, businesses may need an HSBC business account if a debenture is required. A debenture is a loan agreement registered at Companies House between a business and a lender that gives the lender security of the business’s assets.
HSBC provides a Small Business Loan, a Flexible Business Loan and an HSBC Kinetic Small Business Loan, as well as other lending solutions, such as commercial mortgages, business overdrafts, credit cards and asset finance.
Small Business Loan
With an HSBC Small Business Loan, you can borrow from £1,000 to £25,000 over a term of between 12 months and 10 years.
This type of loan has a fixed interest rate, which means that your repayments will stay the same across the loan term.
Repayment holidays are available at the start of the loan term, but will result in you paying more interest overall.
Flexible Business Loan
With a Flexible Business Loan from HSBC, you can borrow from £25,001 up to a potentially high maximum amount that will be subject to approval. You can repay either monthly or quarterly, with a choice of loan terms from between 12 months and 20 years.
Interest rates on this type of loan can be fixed or variable. If you choose a variable interest rate, it can change in line with the Bank of England Base Rate, subject to eligibility and approval.
Repayment holidays for the first 24 months of the loan term (or a shorter length of time if desired) may be available on variable interest Flexible Business Loans. Bear in mind that taking a repayment holiday will increase the total amount of interest charged and therefore the cost of the overall loan, as payments will be higher to ensure your loan will be repaid at the end of the term.
You may be required to put up an asset as security for a Flexible Business Loan. You should be aware that the lender may repossess and sell this asset to cover the value of your loan if you are unable to keep up with your repayments.
Early repayments are permitted, but if the loan is repaid in full early you may have to pay a prepayment fee. Fees for prepayments in a fixed-rate period may also apply.
HSBC Kinetic Small Business Loan
If you’re a sole trader or run a limited company where you’re the sole director, and have an annual turnover up to £2 million, you may be eligible for an HSBC Kinetic Small Business Loan.
You can borrow from £1,000 to £10,000 with this type of loan over a loan term of between one year and 10 years. It has a fixed interest rate, so your repayments will stay the same across the loan term.
HSBC business loans: at a glance
| Amount borrowable | £1,000 to £10,000 (Kinetic Small Business Loan) £1,000 to £25,000 (Small Business Loan) £25,001+ (Flexible Business Loan) |
| Term length | 1 to 10 years (Kinetic Small Business Loan) 1 to 10 years (Small Business Loan) 1 to 20 years (Flexible Business Loan) |
| Web-based customer service | Chat assistant (24/7)Live chat with agent (8am to 8pm Monday to Friday, 8am to 2pm Saturdays) X (formerly Twitter): @HSBC_UK (8am to 8pm) |
| UK customer service number | 03457 606060 (8am to 8pm Monday to Friday, 8am to 2pm Saturdays) |
| App | Yes (iOS and Android) |
| Face-to-face customer service | Yes |
| Access to loans without pre-existing account | Yes |
Where HSBC business loans stands out
Customer service options: HSBC has a range of customer service options available, including a 24/7 chat assistant, the ability to live chat with agents online and via the app, a dedicated Small Business Loans phone line, and support in a branch.
No arrangement fees: There are no arrangement fees if you take out a HSBC Small Business Loan. They may apply, however, when taking out a Flexible Business Loan.
No need to open a HSBC business account: You do not need to open a HSBC business account or Kinetic business account to access a HSBC business loan. That is, unless a debenture or a fixed charge over book and other debts is required.
Payment holidays: With both the Small and Flexible Business Loans, you can take a capital repayment holiday at the start of your loan. For the Small Business Loan, the holiday can be three or six months. For the Flexible Business Loan, meanwhile, it can be for all or part of the first 24 months of the loan, subject to status. You will still be charged interest during your capital repayment holiday, making your loan more expensive overall.
Green SME Cashback Fund: If your business loan is for green projects, such as renewable energy generation or efficiency, you may be eligible for a 1% cashback on the amount you borrow.
Where HSBC business loans fall short
Early repayment fee: While you can make overpayments at no additional cost with an HSBC Small Business Loan, early repayment interest charges may apply if you repay the loan in full early. If you have a Flexible Business Loan and are in a fixed-rate period, then in addition to early repayment interest fees, you may also be charged a prepayment fee.
Maximum amount borrowable: At £25,000, the maximum amount borrowable with a HSBC Small Business Loan is lower than comparable products from many of its traditional banking peers.
Customer reviews: While it is for the brand as a whole, not just its business loans products, HSBC has a ‘Bad’ rating on Trustpilot.
HSBC business loans customer reviews
HSBC UK, as a whole, has a ‘Bad’ Trustpilot rating of 1.4 out of 5, based on over 7,900 reviews. However, these may be from both personal and business customers and are not necessarily specific to the loans products covered on this page.
The lender’s business banking app, on the other hand, has much better reviews:
- App Store: 4.7 out of 5, based on over 31,600 reviews.
- Google Play: 3.8 out of 5, based on over 4,000 reviews.
This information is correct as of 18 August 2023.
HSBC business loans eligibility
To be eligible to apply for an HSBC business loan, you must:
- be at least 18 years of age
- have a business based in the UK
- be a sole trader, run a limited company or be in a business partnership
- have an HSBC business account if you require a debenture on your business loan
- be willing to undergo a credit check
You can use HSBC’s business lending eligibility checker to see whether you’re likely to be approved for a Small Business Loan without formally applying for a loan, which will require a full credit check.
» MORE: Guide to business credit scores
How to apply for a HSBC business loan
When applying for a HSBC Small Business Loan, you will likely need to complete the following steps:
- Decide how much you want to borrow, and for how long.
- Check your eligibility online using HSBC’s tool.
- Apply online or by phone. If you’re an existing HSBC customer, you can apply for a Small Business Loan by logging into your internet banking. If you don’t currently bank with HSBC, you need to call 03457 606060.
- Complete your application. This may involve providing details of your business plan and cash-flow forecasts, as well as details of assets you could use as security, other business interests, your business strategy and accounts from previous financial years, if you have them.
- Wait to hear back if your application has been successful.
» MORE: How to get a business loan
Review methodology
At NerdWallet UK, we base our reviews and our ‘Best’ pages on the results of surveys we undertook about what was important to people who use these products. This allows us to look at products impartially of any commercial arrangements we have and fairly rate the products on the same set of criteria.
Best means our ‘Best’ and is based only on what products we have aligned to our surveys, which form the basis of our reviews and ratings. This means that there will be other products on the market that we have not included in our ‘Best’ pages. Best does not mean it’s best for you, nor does it mean the ‘cheapest’.
Our reviews may display lenders’ rates. This additional information has not been included in our evaluations but is still very important when choosing a product. Rates offered can depend on circumstances, amount and term. Always check details before proceeding with any financial product.
Product details reflect the information that was available at that time but may have changed since. We strive to give you a review on as many products as possible, but there will be products not included on the market. The review is our opinion, but it does not constitute advice, recommendation or suitability for your financial circumstances.
You can view our full review methodology here.