The British Business Bank has, for the first time, named a challenger bank as a partner in its Help to Grow programme.
Under the Help to Grow initiative, SMEs can access loans of up to £2m, specifically to support the development of products and processes, invest in research or target new export marches. Conceived in 2015 and launched in May last year, Help to Grow was initially based on a partnership with Lloyds Bank. Under plans laid out at the time, up to £30m was to be made available through the high street lender.
In an expansion of the programme, the British Business Bank has announced that for the first time a challenger bank -Oaknorth – is coming on board as a partner.
Styling itself as a bank created by entrepreneurs for entrepreneurs, OakNorth was launched in 2015 and has since grown its loan book to around £300m. As things stand, its lending book includes clients across the hospitality, care, property, security and law sectors. The bank typically lends between £1m and £20m with a focus on fast-growth businesses.
Commenting on the partnership, British Business Bank Managing Director for Lending Solutions Judith Hartley said the onboarding of OakNorth underlined a key objective of her organisation. “One of our principal objectives is to increase the diversity of funding options available to growing UK businesses,” she said. “Supporting new entrants to the SME finance market and innovative forms of lending are of key importance to us in achieving that aim.”
The British Business Bank now aims to facilitate lending of up to £1bn to SMEs by 2020 through the Help to Grow scheme. This is part of wider remit to broaden the finance available to SMEs. To that end the Bank has also announced that it will be channelling up to £400m via VC funds to support businesses seeking to scale up.