To ensure Modern Bank is able to efficiently manage significant demand, OakNorth will provide its specially designed online workflow for banks participating in the US Paycheck Protection Program, to help with document collection and end-to-end process streamlining
OakNorth has partnered with New York City-headquartered Modern Bank to support US businesses during the coronavirus (Covid-19) pandemic.
Modern Bank will supply businesses of fewer than 500 employees with loans up to $10 million to cover costs such as payroll, rent and utilities under the recently launched Paycheck Protection Program under the $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act passed at the end of March.
To ensure Modern Bank is able to efficiently manage significant demand, OakNorth will provide its specially designed online workflow for banks participating in the Paycheck Protection Program, to help with document collection and end-to-end process streamlining.
OakNorth will also provide Modern Bank with additional operational capacity through pre-screening of applications.
Commenting on the partnership, which will streamline key decision making and risk management processes, such as loan eligibility, authentication criteria and checks, compliance reviews, credit decisions, and forgiveness eligibility and approval, Rishi Khosla, co-founder of OakNorth, said: “Our platform was built to help get credit to the businesses that needed it most, faster. Modern Bank wants to support US businesses through this crisis, and we want to play our part in helping them and other banks participating in the programme, do this as quickly as possible.”
“As we’ve seen with similar loan programs around the world, banks are experiencing call centre and web traffic that’s up to 50 times the normal levels and are simply unequipped to deal with this level of volume. The operational efficiency gains our solution provides through process streamlining and automation, as well as pre-screening of applications, will enable lenders such as Modern Bank to effectively manage this increase in demand, which means much needed loans will go out to the small businesses who desperately need them.”
In the UK, meanwhile, OakNorth’s banking arm, which provides loans to growth businesses and recorded pre-tax profits of £65.9 million in 2019, has received approval from the British Business Bank to begin lending through the Coronavirus Business Interruption Loan Scheme (CBILS), launched to help businesses manage during the Covid-19 crisis, with the country under a lockdown that is expected to be extended into May.
OakNorth Bank joined Starling Bank, Co-operative Bank and Cynergy Bank in receiving approval last week.
The accreditation means OakNorth Bank and the other approved lenders will work to set up the operational infrastructure required to begin lending under CBILS, which will provide up to £5 million in loans, available on repayment terms of up to six years.
OakNorth Bank and other lenders will confirm shortly the dates from which they will be ready to start receiving CBILS applications from smaller businesses across the UK.
Keith Morgan, chief executive officer of UK government-owned British Business Bank, said: “Our accredited lenders have seen an incredible demand for CBILS in the past few weeks, so we are helping to meet that demand and provide even more choice for smaller businesses by approving additional lenders for accreditation to the scheme. These new lenders will be able to deploy vital funding and get additional finance flowing to smaller businesses across the UK as quickly as possible.”