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Exclusive: NatWest shutters flanker brand Esme Loans

The bank launched the online lending platform back in 2017 and at the last count, it had originated c.£100m of loans to small and medium-sized UK firms.

a man in a suit

NatWest/Richard Kerton

NatWest has closed Esme Loans, a standalone lending platform it launched in 2017.

According to a statement on its website, seen by AltFi yesterday, the brand is being wound up. It said:

"Esme Loans is being closed and is not accepting any new loan applications. Businesses that currently have a loan with us are not affected by this decision and are still able to log into their Dashboard as usual. The team will continue to service current clients and is always happy to speak to customers, brokers and partners to answer any questions they may have,” it said.

Esme Loans, led by CEO Richard Kerton(pictured), began being meaningfully rolled out in 2018 after a successful pilot in 2017 amid the trend for banking incumbents launching ‘flanker brands’ as they began to wake to the fintech threat. 

The fintech lender addressed an underserved but lucrative market of unsecured small business loans, mostly ranging between £5,000 to £150,000. Terms were usually between one and five years and backed by personal guarantees. Borrowers had to be limited companies with two years’ trading history.

The bank threw substantial resources at Esme to take on the likes of Funding Circle including an advertising campaign on the Tube. The central idea being that speed was of the essence as business customers increasingly moved online. 

A NatWest spokesperson said: “We are prioritising our investment spend across the bank on products and services that allow us to provide the best possible support for customers and colleagues. This is more critical than ever given that the pandemic has fundamentally changed the market in which we operate, and the support which our customers need."

"After careful consideration, we have made the decision to wind down Esme Loans. The learnings that underpin Esme Loans will be integrated as we develop our ventures to better support our SME customers, who play such a crucial role in our economy. As a bank, we will continue to test and learn, investing in innovative banking services that will provide a better experience for our new and existing customers, helping them to thrive.”

Funding for loans came from a variety of sources including NatWest but also through Pollen Street Capital which provided cash in 2018.

By the end of 2019, the last available figures, it had lent c.£100m to SMEs with plans to double this in 2020. 

It’s days seem to have been cut short, however, with the pandemic uncertainty the likely culprit. 

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