Business Loans From Challenger Banks
Across the UK, banks have been falling out of favour with customers, who have turned to alternate options in search of cheaper services. This has caused many banks to close their doors and lose out on precious customers. However, a recent survey discovered that new banks are popping up in the UK market, looking to replace the fallen giants of the banking world.
Challenger banks have received criticism from some because they tend to target younger customers who may be unfamiliar with more traditional banking practices. However, these newcomers are starting to chip away at the big banks’ market share because they offer many features that customers have come to expect from more established companies in other industries. Challenger banks have managed to attract customers who previously would have considered traditional banking institutions but who have opted to keep their business elsewhere.
Atom Bank Business Loans
Atom Bank is one of the UK’s newest banks, having launched in April 2015. According to a report from Business Insider Intelligence, the company currently has about £4.2M in loans and deposits, which pales compared to some other banks.
Despite its youth and small size, Atom Bank offers many products as traditional banks, including business loans for companies that need capital for expansion or equipment purchases. The company offers two types of business loans: asset-based lending and invoice finance. Asset-based lending is designed to help companies purchase assets that can be used as collateral on loans from other lenders (such as real estate).
Atom Bank is one of the most prominent challenger banks operating in the UK. Founded in 2013, Atom offers a comprehensive array of services designed to take on the big banks. In addition to offering traditional deposit accounts, Atom offers a range of popular features such as mortgages and savings products and provides both personal and business banking services. Customers can also enjoy free instant transfers between London’s financial district and other parts of England and Wales for all deposits made through its partner network – Lloyds Banking Group, TSB Bank, MBNA and Natwest – or by ATM.
N26 Business Loans
N26 is an alternative to traditional banking founded in Germany but has expanded to the UK and other countries. The company offers no-fee business loans, most of which are funded via peer-to-peer lending. However, it also provides a secure option for customers who prefer to receive funding from a more traditional lender.
To qualify for a loan, customers must first provide information about the business they plan to finance. This can include the industry it operates in, the number of employees and the years it has been in business, among other things. N26 often provides loans of £25,000 or less to businesses that don’t fit into traditional lending parameters because they don’t have collateral, such as property or equipment that can be repossessed if payments aren’t made.
One of the major draws that N26 has for customers is that it offers significant rewards for using its services, including a no-fee business account with no charge for currency exchange when transferring funds between country borders. The company also gives customers access to MasterCard prepaid cards, which can help business owners and entrepreneurs manage cash flow from overseas.
Monzo Business Loans
Monzo is a London-based challenger bank founded in 2015. The company offers both overdrafts and business loans, one of the primary reasons that Monzo has attracted customers in its early stages of financial development. Business funding is designed to help small businesses and entrepreneurs expand their operations by either financing themselves or partnering with institutions that specialize in this area (for example, other banks).
It should be noted that while all of these banks have experienced some level of success, they have yet to hold a significant portion of the UK banking market. Big banks dominate total lending in the UK – according to research by British Bankers’ Association, the big four (Lloyds Banking Group, HSBC Holdings, Standard Chartered and RBS Group) control over 80 per cent of business funding compared to smaller challenger banks.
Benefits of Loaning from Challenger Banks
With the popularization of challenger banks, customers can enjoy some of the benefits of using a conventional bank. For example, many challenger banks offer free ATM withdrawals and free international payments as part of their services. This makes it easier for business owners based in several countries to manage their cash flow, which can be relevant for many international operations entrepreneurs.
In addition to these benefits, some customers choose to use a challenger bank because they receive better customer service than traditional banking institutions. For example, many challenger banks are well-known for providing responsive customer service via social media or chat services. In addition, the fees charged by challenger banks tend to be lower than those of traditional banks, making them attractive to consumers who need low rates while getting large loans.
Challenger Banks – To Conclude
Challenger banks present an attractive alternative to customers dissatisfied with their current options and who would like a local bank with competitive fees that offer more convenience. To use one of these companies as an alternative, customers must understand how the system works and their options for managing their finances.
Funding options discuss obtaining business loans with bad credit in more detail here.
Other useful links about loans:
How to Get a Startup Business Loan
5 Benefits of a Business Car Lease
How to Get a Business Loan
Remember to Compare Your Business Costs is here to help your business every step of the way from business advice, or saving you time and money on your business purchases such as: