ï The PRA and FCA have granted full authorisation to OakNorth Bank to offer deposit products
ï Following the news, OakNorth, the bank for entrepreneurs, has launched its first two savings accounts, which will support the bankís ambitious plans to lend £1 billion to SMEs within the next 5 years
ï Accounts are fixed term Retail deposits with terms of 15 months and 30 months, and competitive rates of 1.85% and 2.10%
ï Minimum deposit of £5,000 and a maximum of £100,000
OakNorth, the bank for entrepreneurs, has been given the green light from the PRA and FCA to offer retail deposit products.
At a time when retail savers are looking for better returns, the launch of the 15 and 30 month fixed-term deposits, which have interest rates of 1.85% per cent and 2.10% per cent respectively, will provide funding that will enable OakNorth to offer loans to small businesses which are seeking growth. As a UK-based bank, the deposits are protected by the Financial Services Compensation Scheme (FSCS).
The full authorisation comes at a time when small business lending is down £5.2 billion compared to last year – despite improving confidence and appetite for borrowing – and means the SME lending void left by the much of the UK banking industry, can finally be addressed.
Lending to SMEs is currently dominated by property-backed loans, which is punitive for the hundreds of thousands of companies that arenít property-rich and for those who quite simply arenít looking for another mortgage. OakNorth seeks to offer flexible financing options, offering SMEs loans that are secured against multiple collateral types, not just property.
OakNorth CEO Rishi Khosla, believes the opportunity to support these businesses will be an added incentive to savers: ìEver since the seed was planted for OakNorth several years ago, we have worked tirelessly to create a bank that specifically meets the needs of small business owners. Savers play a pivotal role in this. Bringing them these accounts today is an important step forward for us as we begin to shake up lending to smaller businesses.î
ìThe government has recognised the need to finance small businesses, but is ending the Funding for Lending scheme in January 2016. By saving with OakNorth savers get competitive rates and at the same time help the SME community.î
By investing in modern systems and technology, and combining this with traditional banking and lending skills, OakNorth will be able to deliver faster service and decision making, more competitive products and a smoother customer experience.