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Bank extends its green finance options for UK businesses

HSBC UK Commercial Bank is helping companies meet their environmental and sustainability goals with a new green finance proposition.

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The range of green options includes green loans and green hire purchase
The range of green options includes green loans and green hire purchase

HSBC UK Commercial Bank has announced a range of ‘green’ finance services to help support businesses deliver on their environmental and sustainability goals.

 

The move follows a pilot launched in November 2018 to large corporate customers with a minimum loan amount of £25m.

 

Green options

 

The new range – available for small to medium enterprises (SME) through to large corporates – includes a green loan, a green revolving credit facility (RCF), a green hire purchase, lease and asset loan.

 

“We have seen strong demand from businesses since launching the green loan pilot last year, so we are confident this suite of green finance products will support our customers to meet their sustainability agendas. Our customers are asking for more green finance products to support their specific ambitions,” said Rob King, head of sustainable finance, HSBC UK Commercial Banking.

"Many stakeholders are now considering a company’s green credentials when making decisions about whether to work with, work for or invest in that company”

“Our offering allows our customers to showcase their green credentials to stakeholders by demonstrating that a portion of their funding is ring-fenced for genuine environmental and sustainability activities. Many stakeholders are now considering a company’s green credentials when making decisions about whether to work with, work for or invest in that company.”

 

HSBC UK has aligned its green lending offering to the Loan Market Association’s green loan principles, which aims to create market standards and guidelines, providing a consistent methodology for use across the wholesale green loan market.

 

The green finance range includes:

 

Green loans: following a pilot launch to larger corporates last year, HSBC UK has broadened its green loan proposition to SMEs and mid-market companies wanting to secure loans for sustainable activities. The minimum green loan starts at £300,000, enabling a broad range of companies to access finance to support sustainability projects.

 

Green RCF: the UK industry first green RCF enables companies to access funds when required, depending on sustainable cash flow needs, and is available for a minimum loan value of £1m. Customers can adopt HSBC UK’s green framework to manage their green cash flows and meet the four pillars of the green loan principles.

 

Green hire purchase, lease and asset loan: the product facilitates the financing of green assets through hire purchase, lease and asset loan.

 

HSBC UK has already provided green loans valuing £600m to UK businesses as part of the pilot, including:

  • Green arranger as part of a club funding package for UK property developer Argent to support the development of Facebook’s new UK headquarters in London, which is one of the world’s greenest buildings.
  • A £175m green loan for Edwardian Hotels London to ensure its new “super boutique” hotel, The Londoner, situated in Leicester Square, will be one of the greenest hotels in the UK. This was, reportedly, the first green loan in the hotels sector.

“With the Government committing the UK to reach net zero carbon emissions by 2050, sustainability is increasingly important for companies of all sizes,” added Amanda Murphy, head of commercial banking, HSBC UK.

 

“We can now support their aspirations through our comprehensive green lending proposition, which supports businesses as they pursue sustainable and environmentally-focused activities”

 

She continued: “This is part of HSBC’s global commitment to provide $100bn in sustainable financing and investment by 2025.”

 

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