SMEs get £500m credit boost

The business finance side of Hitachi has hired a bunch of new bods to oversee a new half-billion credit facility aimed at SMEs.

by Michael Northcott
Last Updated: 19 Aug 2013

In a much-needed burst of support for Britain’s small businesses, and in response to news that SMEs are owed £35bn and are waiting longer than ever to be paid for their services each month, Hitachi Capital Invoice Finance has concocted a scheme for injecting around £500m into the sector. The credit facility will be divided into nine ‘pots’ distributed between different regions around the UK, and it is hoped this will help healthy businesses grow. Sounds great! But what’s the catch? 

Well, there is a certain set of criteria, which Hitachi is using to keep its own interests safe when lending. First, the SME in question has to be in business-to-business trading and turning over between £50,000 and £10m. Second, any money lent to businesses uses already-raised invoices as security on the debt. So the scheme will favour companies that do not have a roster of in-progress projects: Hitachi will not lend to a construction firm on incomplete projects, for example. 

The head of commercial business at Hitachi Capital Invoice Finance, John Atkinson, told MT: ‘With lots of businesses finding it difficult to borrow, we really feel there is room for a new player. This is just the first stage of our initiatives for providing financing services to SMEs.’ So more exciting things to come, then… 

Atkinson also pointed out that any SME struggling to get finance from lenders that are only interested in the health of the balance sheet might be able to find solace with Hitachi’s scheme. In credit-crunchy times and with the economy coughing and spluttering, SMEs need all the help they can get to attack those cashflow issues…

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