NatWest, the UK’s largest business bank with 1.5 million business customers, is set to provide expedited access to loans of up to £250,000 within 24 hours of application, in response to increasing competition from alternative lenders.
The bank has recently conducted a trial of an accelerated online credit approval process for unsecured loans, catering to existing customers seeking amounts of up to £50,000. Encouraged by the success of this trial, NatWest is now poised to extend this service to larger sums at short notice.
Robert Begbie, CEO of NatWest’s commercial banking division, emphasized the importance of banks being readily available for small companies when they require financial assistance, stating, “Dealing with banks is not the day job for small companies; banks should just be there for them when they need it.”
Speaking at a business finance event in London, organized by Oliver Wyman, Begbie highlighted the positive outcomes of the pilot for same-day lending, stating, “It has gone extremely well. We are looking to extend it up to £250,000. It will bring a wider range of customers into the ability to access finance quickly, at a time of their choosing.”
A spokesperson for NatWest revealed that the maximum loan size would initially be raised to £100,000 in the coming months, with a further increase to £250,000 expected by the end of the year. The bank anticipates a 30 per cent surge in new lending to small firms as a result of these initiatives.
This move by NatWest could potentially reverse the decline in business loan and overdraft approval rates witnessed in recent years. Figures from UK Finance, the trade body, indicate a decrease in approvals from a peak of 25,000 in the first quarter of 2022 to approximately 17,000 in the third quarter of the previous year.
The decline in lending by the Big Five banks—NatWest, HSBC, Barclays, Lloyds, and Santander—since 2009 has been offset by the emergence of new players, supported by open banking regulations and targeted lending from government agencies such as the British Business Bank.
As of the end of 2023, half of all smaller companies gained access to external finance, with 59 per cent of funds originating from new lenders like OakNorth, Tide, and ThinCats. Platforms such as Iwoca and Funding Circle already offer quick-decision online business loans, with sums of up to £500,000. Iwoca promises loan approval within 24 hours, while Funding Circle claims funds can be deposited into accounts within two days.
A spokesperson for Iwoca highlighted the success of their investment in new banking technology, stating, “Smaller companies are an under-served market. We are now seeing record levels of interest from business owners. The demand is clearly there.”
