NatWest is set to revolutionise small business lending with expedited loan services.
- The bank will extend quick loan approvals for unsecured loans up to £250,000.
- This initiative follows a successful trial with loans up to £50,000.
- Anticipated increases in lending could counteract declining approval rates.
- Alternative lenders currently dominate the quick-decision loan market.
NatWest, the UK’s largest business bank, is set to provide expedited access to loans of up to £250,000 within 24 hours of the application. This move aims to enhance financial support for small businesses and is driven by increasing competition from alternative lenders.
The initiative follows a successful trial of an accelerated online credit approval process for unsecured loans up to £50,000. Robert Begbie, CEO of NatWest’s commercial banking division, stated, “Dealing with banks is not the day job for small companies; banks should just be there for them when they need it.”
NatWest plans to initially raise the maximum loan size to £100,000 in the coming months, with a further increase to £250,000 expected by the end of the year. The bank anticipates a 30 per cent surge in new lending to small firms as a result of these initiatives.
This strategic move could potentially reverse the decline in business loan and overdraft approval rates witnessed in recent years. Figures from UK Finance indicate a decrease in approvals from a peak of 25,000 in the first quarter of 2022 to approximately 17,000 in the third quarter of the previous year.
As traditional banks have reduced lending, the gap has been filled by new players supported by open banking regulations and government agencies like the British Business Bank. These new lenders, such as OakNorth, Tide, and ThinCats, now account for 59 per cent of external finance for smaller companies. Platforms like Iwoca and Funding Circle also offer quick-decision online business loans, with approvals in 24 hours or funds deposited within two days. A spokesperson for Iwoca noted, “Smaller companies are an under-served market. We are now seeing record levels of interest from business owners. The demand is clearly there.”
NatWest’s initiative to extend quick loans could significantly impact the small business lending landscape.
