Will Shawbrook Bank save Britain's SMEs?

A new bank has been created entirely for the purpose of lending to small businesses. Although it could be too good to be true...

by Emma Haslett
Last Updated: 17 Oct 2011
With their rather dire lending records over the past few years, banks aren’t exactly known friends to small businesses. But all that could be about to change, according to the creators of the brand new Shawbrook Bank, launched today. According to its backers, the new bank has been created entirely for the purposes of lending to small businesses, with a plan to extend £250m worth of credit over the next 12 months and the intention to simplify the loan application process. All of which sounds great – although there’s a bit more to it than meets the eye…  

The bank, based in Brentwood (loans a-plenty for TOWIE’s Sugar Hut, wethinks) but accessible only via brokers or online, has plenty of experience behind it: the chief exec is Owen Woodley, who spent 20 years at Barclays, ex-RBS chairman Sir George Mathewson joins as chairman, and Sir Brian Ivory, the CEO of Highland Distillers, as deputy chairman. The bank will offer secured business loans, as well as savings accounts and secured loans to individuals. Woodley pointed out that it’s particularly keen to push the loans side of things. ‘Having access to the right finance at the right time is vital for an expanding small business – and so is having a straightforward and efficient lending process,’ he said.

Obviously, in the face of most major banks’ decided lack of enthusiasm about lending, this comes across as refreshing stuff. Indeed, while some banks managed to meet the targets set by Project Merlin, several fell short. Of the £38bn they were expected to have lent to small businesses in the first half of the year, only £37.8bn left the coffers.

But how new is this bank? As well as having Mathewson on board, the bank is 100% backed by RBS Equity Finance, the private equity division of (you guessed it) RBS – which was one of the banks that missed its small business lending target. It’s also effectively a merger of three existing operations: Whiteaway Laidlaw Bank, Link Loans and Commercial First – already owned by RBS Equity Finance. So is it really more of a rebranding exercise? Guess we’ll have to wait to find out…

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