The Five Minute Interview with ​Ben Barbanel, Head of Debt Finance, OakNorth Bank
Feb 17, 2020 ~5 minute read

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Founded by entrepreneurs Rishi Khosla and Joel Perlman, OakNorth Bank launched in September 2015 and has already lent more than £4bn to over 750 businesses and property developers across the UK. As a result of its business model, the bank has also been able to support an ever-growing number of loyal deposit customers – now at more than 145,000 account holders – via its savings platform. The bank has been profitable since its 11th month of existence, which reassures businesses and property developers that even though it’s still a young business, it will be here for the long term.

We speak to, Ben Barbanel, Head of Debt Finance at OakNorth Bank:

What is the best thing about being in the specialist finance business?

Seeing the impact we’re having on local communities and the wider economy - since our launch in 2015, we’ve lent c.£4bn to SMEs, and the multiplier effect of this has directly helped bring 13,000 new homes to the country (of which 11,700 are affordable and social housing) and create 17,000 new jobs. We’ve also helped retain thousands of jobs such as construction workers for developments we help fund, and businesses who use finance from us to acquire struggling sites or competitors and turn them around, saving jobs in the process.

However with all this being said, It’s still very early days for us – we have a huge amount we still want to achieve but I’m proud of what we’ve managed to do so far.

I would also add that working in this sector allows you to meet some of the most talented and inspiring entrepreneurs the UK has. We love hearing about their businesses and inviting them in to talk about their future growth plans in front of our credit committee.

What keeps you focused?

Our relentless drive to help UK based small and medium sizes businesses get access to the debt finance they need to grow. SMEs account for 99.9% of the business population and are the backbone of economies and communities globally, helping to generate GDP growth and job creation. This won’t change following the Brexit transition period, so it is vital that they are supported by finance providers (whether that be debt or equity) so that they can obtain the capital they need to scale.

How “easy” the application process is will depend on the size of loan the business is applying for and the level of credit underwriting the lender will have to do to assess whether to lend to them or not. For small business / micro loans, the application process is similar to what you see as a consumer applying for a credit card. Loan sizes can vary but typically don’t exceed $250k and are based on automated, credit-score based systems where the computer says “yes” or “no”.

When it comes to loans of millions of pounds like the kind OakNorth Bank does in the UK however, the level of underwriting needed is much more in-depth and robust, and therefore takes longer than the automated process for micro loans explained above. We have taken steps to make the borrowing process much faster, much more transparent, and much more bespoke, but it’s still not “easy”. In our case, we look for businesses with a proven track record, good cash flow, an experienced management team, and a clear business plan.

What qualities do you look for in your employees or colleagues?

We have a strong set of core values that underpin how we run our business and we look for these qualities in all our staff:

  • 10X: aiming to offer our customers products and services that are 10 times better than the competition.
  • One team: working collaboratively to achieve the best results for our customers.
  • Momentum: ensuring that we put energy and drive into everything we do.
  • Saying it as it is: being open and transparent with all of our stakeholder
  • Right ambition: understanding our purpose and conducting our business in an ethical way
  • Zero Base: our hunger for excellence and 10X mean we constantly zero-base, adapt to our changing environment and are not captive to outdated thinking
  • Customer Delight: consistently bringing an element of magic and unexpectedness to the customer experience that goes above and beyond their expectation

For my team specifically, I look for strong originators who have a great network and relationships with entrepreneurs in the region/s in which they operate.

What will be the greatest challenge facing the specialist finance industry in the coming months?

This challenge may not occur in the coming months, however one of the biggest challenges that the specialist finance sector will need to overcome at some point down the line is to withstand a market correction, proving the viability of individual business models and the strength of management teams. I always believe that the best businesses thrive in times of economic turmoil and with over $1bn in capital raised and sustained profit growth, we’re in a strong position to turn the economic threat into a significant opportunity.

Are you an optimist or a pessimist?

Optimist.

Who or what makes you laugh?

Tom on our comms team – he cracks the best jokes.

Do you dread Monday mornings?

No. I have huge sense of pride waking up and going to work at OakNorth Bank. I get to meet with brilliant businesses, work with some of the best people I’ve ever worked with, and know that with every business we lend to, we’re having a positive impact.

If you could change one thing about yourself, what would it be?

Flowing locks like I had in my teens!

With whom would you most like to have dinner?

I’m a big Spurs fan so has to be José Mourinho.

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