Four UK 'neobanks' launched in the first 10 months of Covid

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our new banks were launched in the UK in the first ten months of the coronavirus crisis, adding to the 41 launched over the previous seven years, according to ACP Altenburg Advisory.

The debt advice providers said the figures referred to new UK banks and branches or subsidiaries of overseas banks approved by the PRA between 1 March to 31 December 2020, and represent the growing options available to businesses looking for finance as CBILS comes to an end.

With the CBILS & BBLS schemes having ended on 31 March, businesses looking to grow may need to turn to an alternative source of finance in the coming months as the high street banks are likely to decrease their lending to SMEs.

Including the four new banks launched in the last year, there have been 23 UK banks to launch since 2013, alongside 22 banks to launch in the UK either as a branch or subsidiary of an overseas bank, the advisory services company said.

These figures do not include the larger challenger banks that have launched since the credit crunch such as Shawbrook, Metro Bank and Aldermore, all providers of asset finance.

The figures show the increasing competition challenger banks are providing to high street banks in providing lending to SMEs.

The three most common types of lending are asset-backed lending (ABL), real estate and cash flow. While the number of lenders and range of debt products has increased across all three types, cash flow lending has seen the biggest increase in the number of lenders and products over the past decade.