OakNorth – the digital bank for entrepreneurs, by entrepreneurs – announces that it has secured authorization from the Federal Reserve and the New York State Department of Financial Services (NYDFS) for a Representative Office in New York.
The authorization will enable OakNorth to “proactively market its products and services from its US office while it continues to explore the possibility of acquiring a banking charter.”
Since its launch in September 2015, OakNorth has focused “on supporting the lower mid-market: scale-up businesses with $1m-$100m turnover that are the drivers of productivity, job creation, innovation, and GDP growth.”
While these businesses represent just 3.4% of all SMEs in the US, they account for 25% of all SME turnover – a clear “demonstration of their outsized economic impact and the positive multiplier effect of supporting them.”
Since its launch in September 2015, OakNorth has lent “over $15bn to these businesses in the UK and US, which has supported the creation of over 47,000 jobs and over 29,000 new homes – the majority of which are social and affordable housing.”
While the US is home to c.4,700 banks, “nearly a fifth of these hold less than $100m in assets and the median is $300m, meaning most simply don’t have the resource or capabilities to cater to the sophisticated requirements of scaling lower mid-market businesses.”
With the collapse of several commercial banks over the last 18 months, “a growing void has been left in the US for lower mid-market businesses.”
OakNorth’s granular, data-driven, and forward-looking approach, “harnessing ONCI, means it is well-placed to fill this void, and it has already successfully completed c.$600m of loans to the lower mid-market in the US since July 2023.”
Rishi Khosla, CEO and co-founder of OakNorth, said minus any marketing they have done 3x the business in the US over the last year than we anticipated. Khosla said this was a demonstration of the demand for a banking partner like OakNorth.
“Securing this authorisation from the US regulators will enable us to significantly build on the c.$600m we have lent to date, and continue supporting businesses that are vital to the economy but are being underserved and overlooked by commercial banks.”
Launched in September 2015 and founded by entrepreneurs, OakNorth is a digital bank focused on “serving and empowering businesses with £$1m-$100m in turnover, that are seeking to scale but are routinely underserved or overlooked by traditional banks.”
To date, it has provided “over $15bn to these businesses across a wide range of sectors, achieving performance metrics that place it amongst the top 1% of commercial banks globally.”
Its loans have directly contributed to the “creation of 47,000 jobs, and over 29,000 new homes across the UK and the US – the majority of which are affordable and social housing.”
It is authorized by the Prudential Regulation Authority and “regulated by the Financial Conduct Authority and the Prudential Regulation Authority.”
