SME lending bank on track with quest for launch funding

A NEW bank targeting small business lending says it is on track to secure backing of between £80 million to £100m by the end of the year to help fund its launch.

The forthcoming British Enterprise Bank (BEB) also claimed it was not concerned by the creation last week of a rival in the SME lending market, Shawbrook.

Shawbrook will be chaired by Sir George Mathewson, a doyen of the banking sector who is a former chief executive and chairman of Royal Bank of Scotland.

However, Justin Chittock, the project manager of BEB, which plans to open more than 20 branches in business parks in the UK, said there was room for both his group and Shawbrook to challenge the incumbent banks in the SME sector.

“Of course, any new player that goes into the SME lending sector would be a competitor to us,” Chittock said. “But we welcome the development. It shows the small business lending market place and demand is still there.”

BEB plans to step up its canvassing of City investors for backing for the project between now and Christmas, Chittock said, and was hopeful of firm financial commitments by January.

He added that the project had also attracted “more than a handful” of top banking advisory figures to help flesh out the details to be presented to investors and the regulator, the Financial Services Authority, after funding commitments are in.

There has been unofficial talk of a launch of the bank by next summer although no firm date has been given by BEB. Chittock said he realised there had been some impatience over the time the bank was taking to get up and running “but we have always thought it is more important to do this right than to do it fast”.