Lending through economic cycles: supporting businesses in the good times and the tougher times

A WORD FROM OUR SUPPORTER:

A couple of months ago, we received a message on Twitter from an entrepreneur who has a small hotel and pub portfolio. The message read: “Our current bank has decided that the hospitality sector is not for them”. They’d been banking with that bank for over a decade…

This is an issue we hear about time and again from businesses we speak to - the economy looks like it’s heading for a rough period, and as a result, certain sectors are temporarily “vetoed” or “black-listed” as ones the bank is unwilling to lend to, regardless of how long a business may have been a loyal customer.

The issue is that most banks tend to lump businesses into one of a dozen or so categories – for example, all restaurants, bars, hotels, golf clubs, spas, etc. are classified as “Hospitality and Leisure”. This disregards the fundamental differences in how these businesses operate and means many either get an immediate rejection or end up with a loan that’s not a good fit for their business needs.

At OakNorth Bank, we take a much more granular approach to lending, using data and analytics to build an in-depth understanding of each business, enabling us to support some of the most well-known and successful growth businesses in the UK – even in times of economic uncertainty.

If your business or a business you’re advising is looking for a loan of £250k up to tens of millions to support growth, working capital, M&A, a management buyout, etc, please get in touch and we’ll see if we can help.