UK Regulator Awards Full Bank License To Cashplus

Cashplus, a credit card lender for small- to mid-sized enterprises (SMEs), has now become a full bank for SMEs in the U.K., a report from AltFi says.

Cashplus was granted an unrestricted banking license by the Prudential Regulation Authority on Wednesday (Feb. 3). The bank now has approval for using its £500 million in customer deposits for lending.

The move could make waves in the SME challenger bank sector, with Cashplus claiming to serve 7 percent of all new U.K. businesses, serving over 1.6 million customers since its 2005 launch.

CEO and founder Rich Wagner said there was “a tremendous amount of potential waiting to be unlocked” now that Cashplus was a bank.

“Where some firms have burned through piles of cash in the pursuit of growth at all costs, our disciplined approach and positive product economics mean that we can grow with confidence,” he said, according to AltFi.

According to Wagner, the banking approval will aid his company in lending £1 billion to SMEs in need.

The AltFi report notes that Cashplus has turned an operating profit every year since 2012, and last year Cashplus generated £50 million in revenue.

Wagner said when it started out the company had first-hand experience with the tribulations that SMEs go through while dealing with big banks. He said the same small companies would now “be crucial to the UK’s economic recovery, and they will need a bank that takes them seriously, providing what they need to be successful.”

“So, while big banks are slamming the door shut, we’ll be welcoming customers, opening up lending and delivering enhanced products to support them through the challenging months ahead,” he said, according to the report.

Rachel Scheuerman, director of Product Solutions for digital card services platform Ondot Systems, told PYMNTS that the card relationship between a consumer and their FI deserves focus, as it is the most common point of interaction a person usually has with an institution.