UK challenger bank Oaknorth has completed a £25m loan to ICG-Longbow (LBOW), the London listed commercial real estate lender.
Oaknorth has said today that it agreed a ‘loan-on-loan’ deal with LBOW, in which the challenger firm will lend the asset manager money which can then be further loaned out to property investors.
The deal is the latest sign of a wider growth within the challenger bank industry, which has ramped up efforts to take on traditional heavyweights such as Investec and Close Brothers in recent months.
A number of challengers have been branching out from small-capped loans to higher ones in a bid to lure in larger clients.
While Oaknorth’s lending limit was £15m when it launched in 2015, the firm has now raised the cap to £40m, having recently reeled in clients such as leading payment provider Netpay.
LBOW chairman Jack Perry said: “We are delighted to be partnering with OakNorth on this loan facility; they have provided a tailored solution to meet our business needs, while executing the transaction in the timeframe we required. They have a demonstrable understanding of the needs of fund investors, and, with property comprising a significant portion of their own lending portfolio; have a deep understanding of the underlying asset class.”