NatWest has confirmed plans to provide more small business owners with finance, following a successful pilot of its digital loans platform.
NatWest’s Esme Loans service – an automated platform providing unsecured business loans of up to £150,000 – was piloted in 2017 as part of the bank’s fintech push.
Loan applications are made exclusively through the digital platform, which, according to NatWest, removes the burden of paperwork for small business owners and cuts the application process down from 21 days to just three minutes.
Once logged into NatWest online banking, small business owners can immediately see how much they are able to borrow. Annual interest rates can be as low 4.08 per cent, and NatWest puts no early charges on full or partial repayments.
In the pilot phase, almost 3,800 small business owners submitted applications, representing over £200m of loan opportunities.
Initially offering owners loans up to £35,000 to help scale their company, NatWest has extended the ceiling to £150,000 for SMEs.
Fresh NatWest research found that transparency and simplicity were the most important factors for small business owners seeking finance, and the bank believes the Esme Loans service meets the needs of UK entrepreneurs.
Commenting on the plans to grow its business lending ambitions, Richard Kerton, head of Esme loans, said the platform had the right expertise to understand small companies.
“As a new scale up business ourselves it is important to us that Esme Loans offers a product and service that reflects what entrepreneurs and SMEs need,” he said.
“Most small business owners believe that applying for a loan will be difficult and time consuming so we’ve focused our efforts on removing any unnecessary complexity from the process and making it as transparent as possible. As a result, the application form only asks for the information we need, our interest rates our published on our website and our pre-checker tool quickly gives customers an accurate view of the cost of a loan.”
Meanwhile, Alison Rose, CEO of commercial and private banking at NatWest, said the evolution of Esme Loans was an “exciting development”.
“As the biggest supporter of UK businesses, and with SMEs and micro businesses representing nearly 97 per cent of the UK’s record 5.9m businesses, it is now more important than ever that we are offering products and services that allow small business owners and entrepreneurs to do what they do best – run their business.”
The sole review for the platform on financial services website Smart Money People was less favourable, rating the service as one star.
With a tailored business banking proposition on offer from each major high street lender, it’s difficult to identify the real differences in the service and finance opportunities available to entrepreneurs.
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