French banking group to offer business loans to UK SMEs
French banking group BNP Paribas is to offer business loans to small and medium-sized businesses in the UK for the first time.
The company has already issued its first UK business loan, which was between £500,000 and £5m – higher than the amount offered by peer-to-peer lending company Funding Circle, which currently lends a maximum of £500,000 to SMEs.
The move will enable BNP Paribas to boost the growth of SMEs in the UK, with the bank also looking to expand its lending activities across Europe. The bank is aiming to lend a total of €1bn per year to businesses across Europe, with at least €400m from the UK.
In order to be eligible for a loan, SMEs will need to have annual revenues of less than £50m. A loan of £500,000 will take a week to process, while a loan of £5m will take five weeks from when the application is received.
Traditional banking still remains popular with SMEs, with businesses relying on bank loans and overdrafts to finance their company. This comes as a result of many SMEs still being hesitant about opting for alternative methods of finance.
As part of the move, BNP Paribas has appointed finance consultancy firm Asset Services, which is part of Link Group, as the debt service for the bank’s SME Alternative Financing Platform.
Commenting on the importance of SME lending in the UK, Asset Services’ Chief Executive Robbie Hughes said: “SMEs are the engine room of our economy, so increasing their finance options and supporting their growth can only be a positive.”