NATWEST has gone head-to-head with peer-to-peer lenders by launching its own automated lending platform for small- and medium-sized enterprises (SMEs).
The new platform, called Esme, will offer new and existing NatWest customers unsecured loans worth up to £150,000 for a maximum of five years. Lending decisions could be made potentially within one hour and there will be no early repayment charges, the bank said.
It is not a P2P platform, as the bank is lending out money from its own balance sheet, but it is another example of a traditional lender improving its digital offering amid fierce competition from fintech firms. Last month, Barclays launched its own SME lending app, which enables it to approve a small business loan in under an hour.
Alison Rose, chief executive of commercial and private banking at NatWest, reportedly said the launch came in response to the rise of P2P and other direct lending websites.
“The last thing SMEs want is to spend hours filling in paper work, so this allows them to quickly complete a digital process,” she told The Financial Times.
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Only UK SMEs with a turnover of more than £15,000 and maximum of £25m will be eligible for NatWest’s new platform. Firms must also have been trading for a minimum of 18 months.
NatWest already refers SMEs to P2P platforms using its capital connections scheme, but now will be able to offer its own instant finance.
“We are excited to launch the trial of Esme this week offering SMEs yet more choice in how they access the funding they need to invest and grow,” said Rose.
“Esme will offer SMEs a quick decision and almost instant funding, allowing those customers to go on and do what they do best – run a business.
“Through capital connections, our panel of five P2P and alternative lenders, we’ve already broadened choices for customers but we wanted to go one step further and create our own alternative lending platform.”