Getting a high street loan can be tricky for new and growing companies (NGCs), but will a push from the government to introduce more 'challenger banks' help?

By Farah Khalique

Getting a high street loan can be tricky, if not impossible, for new and growing companies (NGCs), but there is now a steadily growing number of alternative lenders and a push from the government to introduce more 'challenger banks'.

The demise of bank lending is well documented - there are no shortage of stories from disgruntled businesses owners that have been rejected and forced to look elsewhere. But high street banks are not the only option for companies that need financing; some smaller lenders are picking up the slack and thriving.

Aldemore is one of the more high-profile names. Founded in 2009, it has lent £2.5 billion to SMEs and offers services such as asset finance, invoice financing and small to medium enterprise (SME) commercial mortgages. The bank successfully floated last year for £650 million.

The newest bank on the block is Atom Bank, a digital app-based service that will allow users to log in with a simple selfie and employ voice recognition software. 

Hampshire Trust Bank has been around since 1977, but is now marketing itself as a 'specialist challenger bank' and is expanding into the commercial mortgage sector this year

Last year, UK regulators announced the creation of a new bank start-up unit to encourage more challenger banks. This is welcome news, but smaller entrants like OakNorth Bank, which started lending last year, still face considerable hurdles including strict capital requirements and an 8% surcharge on domestic profits above £25 million.

The newest bank on the block is Atom Bank, a digital app-based service that will allow users to log in with a simple selfie and employ voice recognition software. It secured its banking license in June and is backed by star fund manager, Neil Woodford, as well as Spanish Bank BBVA. Lisa Wood, chief marketing officer at Atom Bank, tells Workspace that the bank is looking to launch "very soon now" and will be offering services for SMEs.

NGCs can now consider an ever-increasing range of lenders before throwing in the towel.

Farah Khalique is a freelance business and financial journalist, with a keen interest in writing about non-bank financing solutions that can help SMEs grow their business. She has written extensively about banking scandals and has made TV appearances on Sky News and The Wall Street Journal Live to comment on topical issues including money laundering and bankers’ bonuses. Follow her on Twitter.