The £1.5 billion consumer lending giant Hitachi Capital is to help sole traders in the plumbing industry with a £25 million fund.
In response to the Bank of England’s reports on the failure of some of its participating banks and building societies to increase loans to small businesses under the Funding for Lending Scheme, Hitachi Capital Consumer Finance recently announced the immediate launch of a multi-million pound loan fund, available exclusively to support the UK’s sole trader market, including those in the plumbing and heating industry.
UK finance specialist Hitachi Capital’s expansion into asset-based loans will fill a real need, with figures showing that lending to the small business and sole trader sector actually shrunk by £2.4 billion in the final quarter of 2012. The new fund, initially £25 million, will provide asset loans from £2.5k to £15k for the UK's 3 million sole traders, including plumbers, builders, electricians and other small traders such as independent cafés and bars to purchase equipment, vehicles and tools.
Gerald Grimes, managing director at Hitachi Capital and chairman of the FLA said: “It is the first time in our 30-year history of providing billions in consumer finance that we have entered the trade loan sector. It is extremely disappointing that some of the banks have accessed £13.8 billion of cheap Funding for Lending Scheme finance and failed to pass this onto hard-working professionals who are the engine room of the economy. The scheme aims to boost the flow of loans and at the moment, it is not living up to expectations.
“I believe one of the key issues is the complexity of the credit approval process. Our new fund for hardworking sole traders will cut though this barrier to finance and offer a simple online application, designed to get capital moving and support the UK's 3 million small traders. This sector of the small business market notoriously finds bank borrowing difficult and we are determined to fill this vital gap in funding and kick start the UK economy.”