OakNorth Bank Bespoke Loans: Is It Right for Your SME?

What OakNorth Bank Is and How It Works

OakNorth Bank is a UK-regulated bank, authorised by the PRA and FCA, that lends exclusively to profitable, established businesses rather than retail customers. Founded in 2015, it focuses on the so-called "missing middle": borrowers too large for standard fintech products but underserved by high-street banks unwilling to structure bespoke deals. Loans are assessed individually rather than scored algorithmically, which means a genuine credit conversation rather than an automated decline.

The bank holds a full UK banking licence, meaning deposits it takes are FSCS-protected up to £85,000 per eligible depositor. On the lending side, borrowers deal with named relationship managers who understand sector-specific cash flow patterns. This model suits owner-managed businesses, property investors, and growing firms that have a complex story to tell.

Loan Sizes, Terms, and Pricing

OakNorth typically lends from £500,000 upwards, with deals reaching £50 million or more for the right borrower; most funded transactions sit in the £1 million to £20 million range. Terms generally run from one to seven years, and the bank will consider both term loans and revolving credit facilities depending on the borrower's needs.

Pricing is individually negotiated rather than published as a headline rate. As of mid-2026, with the BoE base rate at 4.50%, typical OakNorth pricing for well-secured deals tends to sit in the 7% to 11% per annum range, though this varies materially by sector, loan-to-value, and covenant strength. Arrangement fees of 1% to 2% are common. Borrowers should request a full cost of capital illustration before proceeding, including any exit or prepayment provisions, which can be significant on larger structured deals.

Eligibility and Security Requirements

OakNorth lends to UK-registered limited companies and LLPs that are profitable, have at least two to three years of filed accounts, and can demonstrate serviceable cash flow relative to the proposed debt. The bank does not generally support pre-revenue businesses, loss-making turnarounds, or borrowers with unresolved CCJs or insolvency events.

Security is almost always required. Commercial property, residential property held by the business or its directors, debentures over business assets, and personal guarantees are all used in various combinations. The bank applies a commercial LTV test; most property-backed deals require at least 30% equity in the security. Unlike some fintech lenders, OakNorth will consider complex security structures, including cross-charging multiple assets, which can benefit borrowers with spread portfolios. Borrowers should instruct a solicitor early in the process as legal due diligence is thorough.

The Application and Approval Process

OakNorth's process is relationship-led, meaning the first step is a conversation with a relationship manager rather than an online form; initial credit appetite can usually be indicated within a week of that first discussion. Full credit approval, including legal and valuation work, typically takes four to ten weeks depending on complexity.

Documents required at application stage include two to three years of full statutory accounts, current management accounts (ideally within three months of application), a cash flow forecast, details of any existing debt facilities, and a clear explanation of the loan purpose. For property-backed deals, an independent RICS valuation will be commissioned. Directors should be prepared for a detailed credit interview; OakNorth's analysts go deeper than a standard bank credit score review. The process is more demanding than fintech alternatives but the outcome, for eligible borrowers, is a structured facility tailored to the business rather than an off-the-shelf product.

How OakNorth Compares With Alternatives

For deals above £500,000, OakNorth's main competitors are the larger high-street banks (Barclays, NatWest, Lloyds), challenger banks such as Allica Bank and Shawbrook, and specialist lenders such as ThinCats or British Business Bank-accredited regional funds. Each channel suits different borrower profiles.

Allica Bank operates in broadly the same market but tends to focus on smaller tickets, typically £250,000 to £5 million, and has a faster digital process. High-street banks may offer marginally keener pricing for strong relationships but are slower and more likely to decline complex or sector-specific credits. ThinCats and similar platforms suit asset-rich businesses that do not meet bank covenants. OakNorth's differentiator is the bespoke underwriting combined with a regulated balance-sheet lender status, which matters to borrowers who want certainty of funding rather than a marketplace that syndicates risk. Brokers with access to the whole market can help identify which channel is most appropriate before a formal application is submitted.

Strengths and Limitations to Consider

OakNorth's principal strengths are its willingness to underwrite complex deals, its regulated bank status, and the availability of larger loan sizes that most fintech lenders cannot match. For the right borrower, the bespoke process results in a facility that fits the business model rather than forcing it into a standard product.

The limitations are equally important to understand. The minimum ticket of roughly £500,000 excludes the majority of UK SMEs. The timeline of four to ten weeks is unsuitable for urgent liquidity needs. Pricing, while competitive for a bespoke structured lender, is not the cheapest available to businesses with straightforward profiles that could access a high-street bank facility. Personal guarantees are almost universally required, which directors should take independent legal advice on before signing. Finally, OakNorth does not currently operate a consumer-facing open application portal; access is via direct approach or through a commercial finance broker.

When to Approach OakNorth and How to Prepare

OakNorth is most suitable when the loan requirement is £500,000 or above, the business has a demonstrable profit track record, mainstream banks have either declined or offered insufficient flexibility, and there is adequate security to support the borrowing.

Preparation improves outcomes significantly. Businesses should have clean, filed accounts, a clear narrative explaining the loan purpose, and ideally a financial model showing repayment capacity under a stress scenario. Engaging a chartered accountant or commercial finance broker before approaching OakNorth is advisable; well-packaged applications receive faster indicative terms. If there are any adverse credit events in the business or personal credit history of directors, these should be disclosed upfront with context rather than surfacing during due diligence. Transparency at the outset protects the timeline and the relationship with the lender.

Step-by-step

1. Confirm your loan requirement is £500,000 or above and that the business has at least two years of profitable filed accounts.
2. Gather two to three years of statutory accounts, recent management accounts, a cash flow forecast, and details of proposed security assets.
3. Instruct a commercial finance broker or contact OakNorth directly to discuss initial credit appetite before committing to a full application.
4. Commission or prepare a financial model showing projected revenue, EBITDA, and debt service coverage under base and stress scenarios.
5. Instruct a solicitor experienced in commercial lending early; OakNorth's legal due diligence is thorough and early instruction avoids delays.
6. Disclose any adverse credit history, existing charges, or director personal guarantees upfront so the relationship manager can structure around them.
7. Review the full cost illustration, including arrangement fee, interest rate, and any exit or prepayment charges, before accepting heads of terms.

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Frequently asked questions

By Oliver Mackman, Director, Best Business Loans Ltd. Last reviewed 2026-06-23.