A new UK bank launches for SMEs: Redwood Bank

A brand new bank in the UK, with a specific focus on small and medium enterprises (SMEs) has opened. New players on the scene aren’t that frequent and this new entrant is quite interesting. Not only will it be specialising in offering SMES an alternative source of funding it will also be 100% cloud based.

It’s called Redwood Bank and will initially be looking exclusively at SMEs in the Hertfordshire, Bedfordshire, and Buckinghamshire area. It’s owned by Redwood Financial Partners Ltd. and Warrington Borough Council is a shareholder. The council hold 33% of the bank shares and the council has approved a £30 million investment in the bank. Hopefully most of that will be passed onto to SMEs in loans who need a boost.

The bank will be headed up by Gary Wilkinson. He’s a chartered accountant with 30 years experience in the banking and finance sector. He says: “We are delighted to be open for business. We aim to offer a real alternative for small and medium sized organisations. We will provide them simple transparent loans and savings accounts, great service, and a promise that our money is being invested into British businesses and local communities.”

Two things seem heartening about this new endeavour. Firstly, plenty of SMEs can do with fair lending at an honest price. We’ve seen that in ecommerce with companies such as iwoca. Every day cashflow is a big deal for SMEs. Even a modest overdraft or access to cheap credit can be the difference between growth and slump.

And, also, it’s good to see a local council involved here and that’s something I’d like to know more about. Local authorities can borrow money at low, low rates for capital expenditure and infrastructure projects. Indeed, not only can they borrow money, they can then lend it out again for approved schemes and take interest on that too. It’s an income stream for a local council.

Are you eligible to deal with the Redwood Bank? Would you dod so? If you are, let us know.