Joel Perlman: securing growth finance for small businesses

OakNorth provides UK growth businesses and entrepreneurs with bespoke debt finance solutions. Today, the bank is one of the most active lenders in the UK having lent over £3bn with circa 55,000 savings customers.

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Cherry Reynard
Published: 03 Jul 2019 Updated: 13 Jun 2022

OakNorth was created in 2014 to provide UK growth businesses and entrepreneurs with bespoke debt finance solutions. Today, the bank is one of the most active lenders in the UK having lent over £3 billion with circa 55,000 savings customers. Its loans have directly helped with the creation of 10,000 new homes and 13,000 new jobs in the UK.

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The bank is now one of Europe’s most valuable fintechs, having secured a $440 million investment from The Vision Fund, the $100 billion investment portfolio from SoftBank. The addressable market for lending is estimated to be around $7trillion. Here, Joel Perlman, co-founder and senior managing director at OakNorth, discusses the group’s progress.

What was the germination of OakNorth?

In 2006, Rishi Khosla and I faced an uphill struggle while trying to secure working capital to support our previous business venture, Copal Amba. Our business was in a good shape with a healthy cash flow, and strong projections for the future, yet none of the banks we spoke to were willing to lend to us because we didn’t have any property to act as security.

“As Copal Amba kept growing, Rishi and I realised that there are millions of other businesses in the UK facing the same struggles in securing growth finance. The idea for OakNorth began from there. We want to help growth businesses around the world secure the debt finance they need to compete against large corporates.

Which values did you consider most important when building the business?

At OakNorth, our values play a huge role in what we do on a day to day basis, as well as helping us in terms of attracting great employees and keeping them. We want to make sure everyone understands our purpose and conducts our business in an ethical way.

Most importantly, we aim to offer our customers products and services that are ten times better than the competition. To do this, we believe certain elements need to be in place. The team needs to work collaboratively to achieve the best results, putting energy and drive into everything we do.

We also promote a culture of openness and transparency. We aim to ‘say it as it is’. As part of this, we ‘zero base’, questioning the status quo and striving for efficiency.

What was the most difficult element as you grew?

We’re not alone in finding it tough to ensure the company’s culture and values scales effectively as we continue to grow to hundreds of people across multiple markets and offices. In the beginning, we hired too quickly because we needed someone in a seat as soon as possible, before realising it’s better to have no hire than the wrong one - the wrong one will bring down the quality of the whole team.

Did you have any notable bits of luck? Or was it all hard work?

We have been very fortunate and we continue to be very fortunate and we’re very grateful for that. However, hard work is also essential — as they say, the harder you work, the luckier you become.

Do you think there is further disruption ahead in the banking industry?

I think traditional banks will still be around in hundreds of years but consumers’ behaviour towards them will have changed. The majority of consumers and businesses still treat their bank as a one-stop shop, keeping most of their financial products with just one institution, rather than shopping around for the best products and services for their needs.

In the future, I think what we’ll see are a lot more individuals and businesses banking with multiple providers — they might have their current account with one, their savings account with another, go to another for a loan, another for a credit card, and so on.

From a personal point of view, have you ever regretted becoming an entrepreneur?

No, never. I couldn’t imagine doing anything else.

How have you preserved the team relationships? Have you all had assigned roles and responsibilities?

I think at OakNorth, we’re trying to reinvent what it means 'to work'. We don’t want people to think about work and life as mutually exclusive — we want them to think of work as a great part of their life. The worst thing would be if people sat on a Sunday evening dreading the week ahead. So this goes back to our values, making people feel valued, ensuring they see the tangible contribution they’re making at the company, as well as the positive impact they’re having on the wider community and SMEs around the world.

We also give all employees the opportunity to become owners in the business and invest their own money. Today more than a third of our team are owners in the business, having invested the equivalent of a year’s net salary in it. This helps ensure people take decisions for the long term.

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By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.


This article was previously published on Smith & Williamson prior to the launch of Evelyn Partners.