Fintech specialist teams up with new challenger bank
Big-hitters in the burgeoning fintech sector are playing a key role in the development of a new Manchester-based challenger bank that looks set to revolutionise the SME lending market.
Fintech specialist Growth Capital Ventures (GCV) has teamed up with a range of major players in the industry to drive forward the growth of B-North, a start-up established to build the bank and get it up and running later this year.
These partners include B-North founder and director, Craig Iley, former Santander divisional managing director Jonathan Thompson, and David Broadbent, the former chief commercial officer at International Personal Finance.
Once operational, the bank will deliver loans of between £500,000 and £5m to ambitious companies looking to scale up their business, providing finance up to 10 times faster than large mainstream banks.
After securing £4m through an initial seed round in December 2018, B-North has now exceeded its target of raising a further £2.3m via a second round of investment.
The money from round two is being used to strengthen the existing management team and continue building the infrastructure ready for launching the bank later in the year.
An entrepreneur from Middlesbrough with extensive experience of the finance sector, Mr Iley says he has assembled an impressive, highly-experienced and ambitious management team supported by a heavyweight board with a track record of launching and scaling up a challenger bank.
Mr Iley and the leadership team have also worked closely with GCV to raise capital as well as working with internationally-renowned partners, including tech banking specialists Mambu, nCino and ClearBank, to develop a business banking solution capable of processing loans at speed.
Human interaction is also at the core of B-North’s unique business model, with plans to roll-out a network of regional pods consisting of highly-qualified, experienced staff who can sanction a deal within 24 hours and ensure lending solutions can be delivered 10 times faster than those delivered by large incumbent banks.
As of July 2018, the SME lending market was reportedly worth more than £154bn, yet this figure includes £48bn of unmet demand as estimated by the British Business Bank.
B-North aims to disrupt a huge UK SME loans market by delivering fast, efficient funding to highly profitable and scalable SMEs that have been the backbone of the UK economy for a very long time.
Craig Iley said: “SMEs represent the beating heart of the UK economy but need far more financial support than they’re currently getting.
“With centralised decision-making, legacy systems and bureaucratic processes, it can take several months for a large high street bank to complete a loan facility – which is no good for an ambitious SME that needs the cash to invest quickly.
“That’s why we’re so committed to creating a challenger bank that can disrupt the current status quo created by incumbent mainstream banks and other lenders.
Craig Peterson, co-founder and chief operating officer of GCV, said: “The B-North business model is unique. The combination of people and technology allows B-North to deliver face-to-face banking quicker and better than the competition. For investors this is an opportunity to invest in an exciting start-up with high growth potential at the start of their journey.”
It is anticipated that the bank will be operational and lending to SMEs from Spring 2020, once a banking licence has been obtained.
Progress on securing the licence recently took a major step forward when B-North received an ‘Invitation to Apply’ from the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA), two bodies responsible for issuing banking licences.
