Significant Milestone for OakNorth
OakNorth Bank, designed to support entrepreneurs, has reached a significant milestone with its approval from US regulators. The Federal Reserve and the New York State Department of Financial Services (NYDFS) have authorized OakNorth to open a representative office in New York. This pivotal moment will enable OakNorth to market its products and services more effectively while exploring the possibility of acquiring a banking charter.
Focused Support for Lower Mid-Market Businesses
Since its launch in September 2015, OakNorth has concentrated on aiding lower mid-market businesses, those with turnovers between $1 million and $100 million. Although these businesses make up only 3.4% of SMEs in the US, they contribute 25% of SME revenue. OakNorth’s support has been crucial in demonstrating their substantial economic impact and the benefits of investing in these businesses.
Impressive Lending Record
OakNorth has lent over $15 billion to businesses in the UK and the US. This funding has created over 47,000 jobs and developed more than 29,000 new homes, focusing on social and affordable housing. Despite the 4,700 banks in the US, many lack the resources to meet the needs of scaling lower mid-market companies.
Filling the Market Gap
Recent disruptions among commercial banks have created a significant gap in the market for lower mid-market businesses. OakNorth’s detailed and integrated strategy, supported by its ONCI technology, positions it to address this void effectively. Since July 2023, the bank has successfully completed around $600 million in loans to this sector in the US.
Future Outlook
Rishi Khosla, Co-founder and CEO of OakNorth, noted that despite limited marketing efforts, the bank has surpassed its expected business volume in the US over the past year. Khosla views this as a clear indicator of the demand for banks like OakNorth. The new authorization will allow OakNorth to expand on its current success and continue supporting vital, yet underserved, businesses.
About OakNorth
Founded by entrepreneurs, OakNorth serves businesses with turnovers between $1 million and $100 million, often overlooked by traditional banks. Regulated by the UK’s Financial Conduct Authority and Prudential Regulation Authority, OakNorth ranks among the top 1% of global commercial banks for its impactful lending.