OakNorth – the digital bank for entrepreneurs, by entrepreneurs – today announces that it has secured authorisation from the Federal Reserve and the New York State Department of Financial Services (NYDFS) for a Representative Office in New York.
The authorisation 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: “Without doing any marketing, we’ve done about three times more business in the US over the last year than we thought we would have done by this point. This is a clear demonstration of the demand from the lower mid-market for a banking partner like OakNorth, which can provide the speed, flexibility, transparency and entrepreneurial approach these businesses need to succeed and scale. 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.”