New bank to plug SME funding gap
START-UP bank Recognise is aiming to lend up to £40million to small to medium sized enterprises (SMEs) within its first four months, deputy chief executive Bryce Glover says.
The specialist small business lender gained its banking licence last week and is believed to be the first new bank to receive authorisation from regulators at the Bank of England and Financial Conduct Authority since the pandemic started.
Many SMEs have been hit by the turmoil caused by coronavirus and Glover said Recognise wants to help plug the funding gap many face.
It will look to lend £25million to £40million in its first four months and £250million by the end of its first year. Its target market is established businesses looking to borrow £100,000 to £5million. “The demand is there. We could see that before we launched,” Glover said. He added that borrowers would get a decision in principle from the bank within two to three working days.
Initially, Recognise will offer SMEs short-term working capital and bridging loans, as well as commercial property loans. During the second quarter of 2021, it will look to offer asset finance, where clients can borrow to either purchase equipment or machinery or release money from the assets they already own.
One area where Glover said that Recognise wants to make a mark is business banking and savings accounts.”Very often SMEs do not get the same competitive rates as personal savers do. There is an opportunity for us to differentiate ourselves and help SMEs out,” he said.
This article appeared in The Sunday Express on 15th November 2020