Originally written by Timothy Adler on Small Business
The first two fintech banks have been added to the government’s coronavirus emergency business interruption loan scheme in an effort to break the logjam.
Other fintechs, including Funding Circle, Iwoca and Market Finance, which together have provided loans worth billions of pounds to small businesses, are also hoping to get approval to join the emergency loan scheme next week.
Only 2,500 loans worth £450m, have been agreed so far through the Coronavirus Business Interruption Loan Scheme (CBILS) out of a small business population of 5.9m.
Bankers say they have been overwhelmed with applications through the CBILS, with an estimated 300,000 enquiries.
Plus they complain that their loan book must be scrutinised by the British Business Bank, which itself is overwhelmed by the volume of loan applications.
>See also: 12 of the best digital banking platforms for small business
Yesterday, former Treasury secretary Baroness Morgan called for the CBILS to be opened up to fintechs, which, she said were more agile and more nimble than traditional lenders.
OakNorth Bank and Starling Bank have been added to the dozens of existing accredited lenders, alongside Cynergy Bank and The Co-Operative Bank.
Meanwhile, Arkle Finance, Close Brothers and Secure Trust Bank have also become accredited CBILS
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OakNorth offers mortgages to small business entrepreneurs
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
OakNorth, the specialist business bank, is to offer mortgages to small business owners and entrepreneurs for the first time.
It believes that SME business owners are under-served by traditional mortgage lenders because they cannot prove regular income. Instead, they are often asset rich with money locked up in their businesses or property.
OakNorth will lend from £500,000 and plans to differentiate itself by offering quick turnarounds on decisions and taking a holistic view of an entrepreneur’s finances. (In exceptional cases, it will lend from £250,000).
It plans to close £260m worth of mortgages by the end of 2019, carving out a 5-10pc share of the £4.3bn residential mortgage market by year-end.
One in 10 business owners in the UK are unable to access the finance they need to purchase their first home, says OakNorth.
The six largest UK banks dominate 77pc of the mortgage market but often find it unviable to create bespoke mortgages for SME business owners. Entrepreneurs who may be asset rich but regular income poor usually find it difficult to pass the high street banks’ lending criteria, as most banks only accept established and regular payments as “income”.
The challenger bank has taken on three veteran