Allica Bank is launching a £100 million funding round to help it meet the demand for new financing it is experiencing from British businesses.

The business bank - formerly CivilisedBank - which received full UK banking authorisation in late 2019, has had over £1 billion of enquiries during the pandemic. The new funding will enable it to broaden services and product lines, while also positioning it for any merger or acquisition opportunities that materialise in the non-bank lending market.

The announcement comes as Allica completed a follow-on investment of £26 million, led by existing majority shareholder Warwick Capital Partners.

Chief executive Richard Davies joined the firm from Revolut in August, with ambitions to accelerate its growth trajectory and fill the growing small business funding gap.

“Established small and medium-sized enterprises (SMEs) will be vital to the recovery and health of the UK economy, but it is clear that the supply of finance has been very badly damaged by COVID-19 outside of the government schemes.

"The time is now for Allica to scale up its operations to meet this business funding gap, bringing a blend of human relationships, deep lending expertise, and digital disruption," continued Davies. "Together with potential acquisition opportunities of non bank lenders impacted by the pandemic, we intend to create the leading SME challenger bank for the decade ahead.”

A recent survey of commercial finance brokers, conducted by Allica Bank, revealed that 63 per cent had seen a significant reduction to the supply of business lending this year. Additionally, 98 per cent were concerned about business lenders’ credit appetite and liquidity over the next two years.

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