Growth Street raises £7.5m for small business lending ahead of Brexit

The business lending platforms says UK overdraft borrowing has fallen by £18bn in the decade to 2018.

Business lending platform Growth Street has raised a £7.5m to boost its loans to small firms as they prepare for Brexit.

The London-based business said “as the UK prepares for its exit from the European Union” it plans to “shake up an ossified lending market and accelerate loan book growth”. The UK is currently set to leave the EU on 29 March.

The platform added that the “scale up” funding was led by London-listed Merian Chrysalis Investment and also included such notable investors as Rob Rankin, former co-head of Corporate Banking & Securities at Deutsche Bank, and Peter Brodnicki, chief executive of the Mortgage Advice Bureau.

Growth Street was founded by chief executive Greg Carter (pictured) and serial investor Thomas Hoegh in 2014, and provides bank overdrafts to firms of up to £2m.

The lender said its own research shows that since the financial crisis total UK overdraft lending fallen by around £18bn between 2008 and 2018.

Hoegh said: “Having built and backed more than 50 tech businesses, I have experienced entrepreneurs’ struggles first-hand. With Growth Street, we give business owners the financial flexibility they need, right when they need it.”

Analysts at Liberum added: "Merian Chrysalis's offering is unique in that it provides investors with access to the returns available from investing in later-stage, private businesses with long-term growth potential, an investment class that has traditionally been difficult to access for individual investors. These businesses will likely be looking at an initial public offering in the short to medium term."

Last July, leading app-only bank Starling added Growth Street to its marketplace of third-party products. Starling’s marketplace allows its customers to access a range of third-party products seamlessly, without ever leaving the app.