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B-North plans to lend £1bn to small businesses within four years

B-North plans to lend £1bn to small businesses within four years


Opening soon: B-North CEO Jonathan Thompson (L) and chairman Ron Emerson (R)

B-North, the Manchester-based small business lender, plans to lend over £1bn to small businesses within its first four years.

The lender, which hopes to secure a provisional banking licence within weeks, will rebrand as Bank North once the licence comes through.

Initially, B-North aims to lend about £50m as its systems are tested under the scrutiny of the banking regulator.

Filling the gap

B-North sees itself as filling the gap for small business lending as the Big Four banksBarclays, HSBC, Lloyds, NatWest – have centralised lending decisions, concentrating on large firms, making it difficult for them to get into the intricacies of each small business.

At first, B-North will offer secured loans of between £500,000 and £5 million.

The service plans to start in Manchester but eventually it expects to have eight regional “lending pods”, each effectively a small bank on its own.

Its founders include Jonathan Thompson, a former Santander banker who will be its chief executive, and chairman Ron Emerson, who was founding chairman of the British Business Bank.

B-North says that it will offer the fast, technology-driven credit decisions of a fintech — it claims that it will be up to 10 times faster than a traditional bank — along with a personalised service long since abandoned by high street incumbents.

It will take a decentralised approach, giving regional relationship managers, underwriters and valuers latitude when making lending decisions.

Last year, B-North told Small Business that it envisaged 70 per cent of its loan referrals coming through financial brokers, with the other 30 per cent coming through branch walk-ins.

Once its banking licence is approved, B-North plans to offer fixed-term bonds to private investors to raise capital. As a dedicated SME lander, B-North’s capital base has to be triple of what’s required for a high-street incumbent.

“If you ask a bank for a deal, it will take three to four months and it could be a ‘no’ and you have to start again,” Mr Emerson told The Times. “I’m not sure how they fix that. It’s a product of legacy structures, both of systems and physical structures.”

“The risk analysis [in credit decisions] has to be around knowing the players. You’ve got to look [borrowers] in the eye and ask, ‘Do they have the skill-set to take it to the next level?’”



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