Originally written by Timothy Adler on Small Business
The Government has established a Business Finance Council to help small businesses access funding once the UK has left the European Union.
Business secretary Andrea Leadsom will co-chair the council with economic secretary John Glen, which will be made up of representatives from high-street banks and alternative lenders.
The council will identify and help overcome any barriers faced by small and medium-sized businesses in securing the finance they need, particularly working capital and investment.
Leadsom said: “Our new Business Finance Council will bring together key players, ensuring that finance continues to flow to our brilliant businesses so they can do just that.”
Glen added: “It’s vital that businesses engage with their lenders ahead of Brexit and the new Business Finance Council will ensure government, banks and other lenders work together to help SMEs access the finance they need.”
Michael Gove, the minister in charge of no-deal preparations and small business minister Kelly Tolhurst were also present at the meeting on Thursday.
Banks and alternative lenders summoned to the Cabinet Office included Barclays, Bibby Financial Services, British Business Bank, Close Brothers, CYBG/Virgin Money, Funding Circle, HSBC, Lloyds, Metro Bank, RBS, Santander, Secure Trust Bank, Shawbrook, TSB and UK Finance.
“The mood
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Exclusive – B-North to open national small business bank by end-2020
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
B-North plans to open a national network of small business-only bank branches across England by the end of 2020.
The start-up bank, which has raised £4.5m in seed funding so far, plans to offer small business loans of anything between £500,000 up to £5m when it opens its doors.
Manchester will be the first B-North branch (or “lending pod”) to open next door, followed by branches opening in Yorkshire, the Midlands and London in stage one. B-North has identified another four locations for stage two.
Founders of the bank – which is currently in the process of applying for a banking licence – believe there is a gap in the market for an SME lender offering loans higher than the almost-instant debt offered by fintechs and peer-to-peer lenders, while offering faster lending decisions than incumbent high-street banks.
Spotcap, for example, offers loans of up to £250,000 to small businesses, priding itself on one-day decisions, while rival Esme offers fully automated SME loans of up to £150,000.
Currently, with traditional banks, requests for loans have to be passed upward to head office and can take between three and four months to be rubber stamped.
B-North’s highly localised model will allow
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KPMG urges SMEs to speak to banks before shock of no-deal Brexit
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Small businesses should speak to their banks about their debt facilities now, ahead of a possible no-deal Brexit, advises KPMG.
Banks have been putting small businesses under the microscope, figuring out which ones would be most vulnerable if Britain were to crash out of the European Union without a deal.
SME lending could be tightened up as the shock of a no-deal Brexit reverberates around the economy.
“Credit could be a little squeezed in the interim. If you haven’t had that conversation with your high-street bank, best have it now,” said Richard Bernau, director at KPMG.
Small businesses should ensure that their working capital facility remains intact should the UK suffer a disorderly exit from the EU, check the employment status of European Union nationals, and make sure their international supply chains are robust.
Although the Bank of England believes the banking sector is well prepared for a no-deal Brexit, SMEs could still find their access to credit dry up in a sudden downturn.
“Any bad or malign economic impact will have an impact on their ability to lend and the terms they are prepared to do so,” Andrew Pilgrim at EY told the Daily Telegraph.
Bernau said that banks
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Q&A Ian Rand, CEO of Barclays Business Banking
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Ian Rand, chief executive of Barclays Business Banking, looks down from the 30th floor of his Canary Wharf eyrie in headquarters and sighs.
Rand, the personable boss of SME lending, who has been with Barclays for over a decade, worries that there is a huge divide between most small businesses and the white-hot tech startups raising millions in the City of London beyond his window.
“A typical business is not a fintech in Shoreditch,” he says. “A typical SME is a man or a woman in a white van, with a single shop where they’re struggling to pay the rent and the rates, and they’re finding it difficult to get someone to man the till on a Saturday.”
The ex-army officer, who spends a lot of time on the road speaking to business owners (“Norfolk, Wales, Leicester and Sunderland,” he says, recounting where he’s been to in the last couple of weeks), is responsible for over one million Barclays Business Banking clients. Businesses range in size from startups through to companies with turnover of up to £10m.
Barclays, which currently has a 24pc share of the business banking market, offers a network of 1,500 relationship managers at
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Barclays business CEO worries SME lending bubble could burst
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Barclays Bank business banking CEO Ian Rand worries that Britain’s peer-to-peer SME lending market could be a bubble about to burst.
According to the British Business Bank, the value of peer-to-peer SME lending grew by 51pc in 2017 to £1.7bn.
However, the Barclays business banking CEO says that entrepreneurs turned down for loans by high street banks turn to alternative lenders. This could see the collapse of an alternative lender if lending criteria becomes too lax.
Rand told Small Business: “There were a lot of people that banks wouldn’t lend to who went to Wonga instead. That didn’t work out too well for them or for Wonga. I am nervous that we could be going down the same path with business lending.”
Rand said that new fintech entrants to small business lending do not have the same “duty of care” as high street banks if SMEs get into distress and cannot repay their loans. This is because some are not signatories of the Standards of Lending Practice, which all the high street banks have signed.
Distressed debtors
In the past RBS has been criticised for the small number of distressed debtors that emerged from its Global Restructuring Group recovery
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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
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NatWest doubles its Growth Fund pot for small businesses to £6bn
by Timothy Adler • • 0 Comments
NatWest has doubled its small firms Growth Fund pot to £6 billion, citing the need to help SMEs to help navigate Brexit disruption. The bank launched its £3 billion NatWest Growth Fund programme in May 2018, and £2.9 billion of that initial tranche has already been committed — £800 million to green environmentally friendly initiatives.
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SME lending: 56% of the country saw value of loans fall last year
by Anna Jordan • • 0 Comments
Over half the country has seen lending to SMEs fall over the past year, with Birmingham suffering the most. New research from specialist debt adviser, Hadrian’s Wall Capital (HWC), highlights a fall in 74 out of 132 postal areas of Great Britain in the value of outstanding loans. Figures also show a fall in SME
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