OakNorth business loans review February 2023

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OakNorth business loans overview

OakNorth offers business financing solutions that are far from “off the shelf” – forget algorithms that instantly approve/reject you for a run-of-the-mill business loan, OakNorth is all about bespoke fixed-term or revolving-credit loans based on individual needs and underwritten by human beings who look at more than just your collateral. And, it aims to do this without slowing down the process unduly.

It’s a direct lender (not a broker) that was founded in 2015 by business partners Rishi Khosla and Joel Perlman, after they had previously struggled to secure working capital to grow their own successful business. The pair wanted to help other new business owners by creating a lender that is “by entrepreneurs, for entrepreneurs”, and it’s fair to say they’ve created a business lender that’s different to most.

In 2017, OakNorth became the first challenger bank to partner with the British Business Bank in its Help to Grow programme, with the aim to support up to £1 billion of lending to fast-growth businesses by 2020.

The company has offices in London and Manchester, and has now lent almost £3 billion to businesses across the UK. If you’ve been turned down for credit from the mainstream banks because of a lack of assets for security or long-term accounts, OakNorth could be a good option for you.

Key features of OakNorth loans

• Loans from £250,000 to £45 million. Choose a loan amount to suit the size and requirements of your business.
• Fixed term or rolling credit options available. Spread your repayments over a term that suits you and your business or enhanced flexibility through revolving credit up to an agreed limit.
• Human underwriting. OakNorth invites customers to a “credit committee” where you can discuss your business, growth plans and funding requirements directly with the decision makers.
• Fast decision and payout. OakNorth aims to give you a quick decision on your loan and will keep you informed along the way through your online account.
• Online account management. View your outstanding balance and make payments through your online account.

How can I apply?

If you are interested in a business loan from OakNorth, simply fill in the contact form on the website and a lending director will call you to discuss your needs.

As part of the loan process, you’ll be invited to a “loan committee” where you can discuss your business, plans for its growth and your funding requirements directly with the decision makers. The decision on your loan will ultimately be made by a panel.

OakNorth Bank customer reviews

OakNorth Bank has received positive reviews from customers on the review website Trustpilot, where it currently has an “excellent” rating of 4.7 out of 5, based on over 540 reviews (updated July 2022).

Over 78% of customers on Trustpilot gave OakNorth Bank an “excellent” review, with people highlighting their competitive rates and helpful customer service.

Alternative sources of funding

There are several types of business financing out there – the list below isn’t exhaustive. The right option for your business will depend on factors like how much you need and when you need it, the collateral you have available to use as security, and the age, size and credit history of your business. You should consider your options carefully before taking out a business loan.

• Government start up loan. If you have a new business, you could borrow up to £25,000 at a low interest rate. You may also be eligible for a government grant.
• Unsecured business loan. The opposite of asset financing, with an unsecured business loan you won’t need to offer any asset as security. The downside of this is that these loans are typically for smaller sums.
• Asset financing. If your business has some valuable assets – equipment or property for example, you may wish to use these assets as security – especially if you’re borrowing a larger sum or if your company has a limited/damaged credit record.
• Invoice financing. This option lets you use your invoices as security for a loan.
• Short-term loan. These are offered over a few weeks or months and typically come with a higher interest rate than other types of borrowing. You could get a loan of up to £200,000.
• Business line of credit. When you need flexibility, a revolving line of credit lets you borrow only what you need, when you need it, and then repay this as and when it suits you (subject to agreed limits).
• Peer to peer loan. This is when your business borrows money from individual investors online instead of through a mainstream financial institution.

As well as the loan options listed above, you could also consider a business overdraft or a business credit card.

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Invoice financing

Unlock the value in your invoices today to access the funding your business needs to move forward.

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Asset financing

Borrow against equipment or property to accelerate your company’s growth.

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Frequently asked questions

• Does OakNorth have any branches?

  No, OakNorth is a digital-only lender. You can access your account at any time online or by phone.

• How quickly will I get a decision on a loan?

  OakNorth says it aims to give you a quick decision. However, as it personally underwrites each loan, rather than using a computer algorithm, the time this takes can vary. You can check the progress of your loan through your online account.

• What sectors does OakNorth lend to?

  OakNorth has lent to a wide range of sectors from care homes, nurseries, restaurants and bar chains to private equity firms, recruitment companies, art galleries and hotels.

• How do I repay my loan?

  When you take out a business loan with OakNorth you can choose between a term repayment, with fixed repayments each month over a set period, or rolling credit which means your loan is always available up to your agreed limit. When you pay off your loan in part or in full, that money becomes available to borrow again. You’ll need to think carefully about the needs of your business to decide which option is best for you.