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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Nationwide wins £50m prize to help boost small business banking
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Nationwide Building Society has won a £50m grant to help support small businesses.
The award is part of a £775m programme funded by Royal Bank of Scotland as a condition of its bailout during the financial crisis. A total of £425m will be given in cash grants to rival business banks and financial technology companies, while a further £350m is being used to encourage RBS customers to switch to alternative providers.
Investec and the Co-Operative Bank, which won smaller awards of £15m each, have also pledged to match the prize with their own investments.
Nationwide will use the money to deliver new services for SMEs. The building society will match every pound received over five years to shape new products and services.
Nationwide says 7,000 branch workers will be trained in business banking and it will create a further 400 jobs. including at the society’s head office in Swindon, Wiltshire.
The society is the only major high street provider currently not to offer a business current account.
Five big banks dominate 85pc of the business lending market, where switching levels are low.
Nationwide aims to shake up the market by focusing squarely on supporting the UK’s 5.6 million SMEs. Among
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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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Government launches scheme to help fund small builders
by Timothy Adler • • 0 Comments
Originally written by Timothy Adler on Small Business
Small builders are set for a boost as the government launches a scheme to fund home building developments.
The state-owned British Business Bank will make up to £1bn of guarantees available to banks that that lend to small builders. This will reduce the amount of capital these banks are required to hold against such small builder finance, encouraging additional lending to smaller developers.
The chancellor pledges to help small and medium-sized builders in last autumn’s budget in an effort to hit the 300,000 new homes every year.
The BBB has struck deals with specialist lenders to help with small builder finance, but this is the first time a dedicated scheme has been set up for the industry.
ENABLE Build is a new variant of the BBB’s existing ENABLE guarantee programme, which takes on a portion of the lender’s risk on a portfolio of loans to smaller businesses, in return for a fee.
The scheme is open to applications from banks where at least 80pc of the loans are to developments in England. (Housing policy in Scotland, Wales and Northern Ireland is developed to their governments.)
The proportion of homes put up by small builders has halved since the late
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What are the best business bank accounts in the UK?
by Partner Content • • 0 Comments
Originally written by Partner Content on Small Business
Having the right bank account is integral to running your small business.
Compare Business Bank Account Deals
Compare the UK’s top business bank accounts from the high street to the alternatives
1. What type of business bank account are you interested in?
New Business / Startup Account
Switching Bank Account
Account With No Credit Checks
Unsure (Show me everything)
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UK Finance has teamed up with UK banking providers to pull together some guidelines on what you need before you apply for a business bank account.
These rules only apply to existing businesses that have a turnover of less than £6.5 million, have a clearly-defined ownership structure and all of the business’ owners operate in the UK.
In general, UK Finance recommends that you get the following bits of documentation ready in advance. Most business current account providers will be looking a few key pieces of information.
One document to prove your identity:
Your full and valid UK or foreign passport
Your national identity photocard
Your full UK paper driving licence
Your full UK or foreign photocard driving licence as issued by a member state of the EU or the EEA
One document to prove your address in the UK:
Your full UK
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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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Banking – the future for small to medium sized businesses
by Stephanie Spicer • • 0 Comments
There is nothing small about the small to medium sized business (SME) sector in the UK. In 2018 it accounted for 60% of all private sector employment, according to the Federation of Small Businesses, with a combined annual turnover of £2 trillion making it a significant contributor the economic health of the country. This makes
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Barclays launches £15bn Brexit fund to help small business through Brexit
by Timothy Adler • • 0 Comments
Barclays has announced a £14.7 billion lending fund to help small and medium-sized businesses (SMEs) negotiate Brexit and beyond. The Barclays Brexit fund, which is a three-year commitment, will offer the following: – Business loans, commercial mortgages and overdrafts up to £250,000 working capital – Cash flow funding for investment in growth, management buy-outs and
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Challenger and digital banks secure new funds to help small businesses
by Stephanie Spicer • • 0 Comments
Small businesses are to benefit from £300m of funding through UK banks. Starling Bank, Clearbank and Metro Bank have won grants from RBS to fund small businesses. Starling Bank, the digital bank, has been awarded £100m and pledges to create 398 new jobs in the UK, invest £95 million of its own money and make
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