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LHV UK Ready to Issue £500,000 SME Loans

Banking services provider LHV UK is to begin issuing SME loans starting from £500,000, following the Financial Conduct Authority’s (FCA) Annex I financial institution registration.

LHV UK acquired the SME lending business of Manchester-based regional lender Bank North in October 2022. The transaction included a £17.9million loan book, of which LHV UK was only able to serve existing customers. Twenty sales and support staff were also acquired as part of the deal, alongside cooperation agreements with major loan brokers.

LHV UK‘s enrollment in the FCA’s register enables LHV UK to immediately start issuing commercial real-estate-backed loans starting from £500,000.

The Manchester-based team has formed LHV UK’s SME lending business. The team are to maintain its regional approach and develop relationships with local commercial brokers.

The company’s Manchester office serves the North of the UK. LHV UK also plans to begin issuing loans in the South East via its existing London headquarters.

Madis Toomsalu, LHV UK
Madis Toomsalu, chairman of LHV UK

Madis Toomsalu, chairman of LHV UK, commented on the news. He said: “Lending to enterprises has been the core business area of our parent company LHV Group, where it enjoyed 14 years of consecutive growth.

“There is a strong proven demand for SME loans, and we are confident that by leveraging our considerable experience and readily available capital, LHV UK can quickly establish and grow a strong lending business.

“Our strengths are also technology-powered faster lending process and loan managers with long-term experience who understand the needs of local entrepreneurs.”

Strengthening its position in UK lending 

The banking services provider explained that it is currently working towards gaining a full UK banking licence. Its application was submitted in March 2022 and is subject to regulatory approval by the Prudential Regulatory Authority and the FCA.

LHV UK has also appointed risk and data science consultancy, Jaywing to help create its cloud-based data infrastructure. Overall, the move was made to support its application for its UK banking license.

Jaywing has been tasked with establishing a data infrastructure and reporting suite in line with UK regulatory standards. The consultancy is to also optimise LHV UK’s AWS-based data infrastructure for regulatory reporting.

Russell Fogg, chief information officer for LHV UK, explained the decision. He said: “We were originally looking for two contract data engineers to help us develop our data infrastructure. Jaywing provided a better solution. A flexible team of data engineers, DevOps and regulation experts with the right skills to meet our ambitious deadline. We are delighted to be working with the consultancy and support other UK fintech companies in the process.”

Inderjit Mund, data management practice director at Jaywing, also commented. Mund said: “Jaywing’s data engineering specialists are always thrilled to support organisations launching businesses in the UK. We are excited to not only work with the ambitious team at LHV UK, but also provide them with the data infrastructure they need to successfully operate in the UK.”

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