Esme Loans, the digital lending platform for SMEs launched by NatWest last year, has announced growth plans following the success of its pilot.

The digital offshoot offers a simplified, paperless end-to-end process with competitive rates for businesses looking to borrow up to £150,000. During the pilot period Esme Loans received nearly 3,800 applications, representing over £200m of loan opportunities, and between 75-85 per cent of SME customers said they would recommend the product and/or use it again.

Richard Kerton, head of Esme Loans, said his team was constantly engaging with customers throughout the pilot phase, “and the most common feedback we received was that a lending process that is transparent, simple and stress-free is what business owners want”.

The news comes as the Financial Conduct Authority (FCA) published its interim report into the mortgage market, calling for more innovation to help consumers find the best deal.

Christopher Woolard, executive director of strategy and competition at the FCA, said that for many the market is working well with high levels of consumer engagement.

“However, we believe that things could work better with more innovative tools to help consumers,” he stated. “There are also a number of long-standing borrowers that have kept up-to-date with their mortgage repayments but are unable to get a new mortgage deal; we want to explore ways that we, and the industry, can help them.”

The FCA's interim findings showed that there is no easy way for a consumer to be confident, at an early stage, of the mortgage products for which they qualify – something deemed a significant impediment to shopping around.

A “significant minority” of customers (around 30 per cent) fail to find the cheapest mortgage for them, while a number of longstanding customers would benefit from switching away from a reversion rate but cannot, despite being up-to-date with payments.

The FCA suggested removing barriers to innovation in the sale of mortgages, including those due to aspects of FCA advice rules and guidance, and making it easier for consumers to assess the strengths of different mortgage brokers.
The regulator is therefore consulting on its interim findings and proposed remedies, with a final report due around the end of the year.

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