ARTICLE Like entrepreneurs, they are self-starters and know what they are meant to do in life. Whilst working within NatWest and wider RBS Group, the trio knew in their hearts that there was too much uncertainty and complexity surrounding business loans and that it was time for a different approach.
INTRODUCING ESME LOANS: After years of seeing friends and family go to extreme lengths to grow a business without securing a business loan, Richard Kerton, Veronika Lovett and Lucy Hasson knew something had to change. The three left their comfortable jobs in the corporate banking world to launch Esme Loans, an online business lender with simple, fair terms and a hassle-free application process. “We saw friends use things like credit cards and overdrafts, which is often not the most optimal way to fund the business needs,” explained Veronika, Esme’s marketing director. “It shouldn’t be easier to get a credit card than a business loan. People shouldn’t be nervous or scared about borrowing for business needs, especially given how comfortable many are borrowing for personal ones.” With years of experience dealing with finance for small businesses, the three founders were confident that they could use this expertise and entrepreneurial endeavour to create something that really works for entrepreneurs and their businesses. ‘We’re not your typical bankers and Esme is very much not your typical business loan.’
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WE SAW FRIENDS USE THINGS LIKE CREDIT CARDS AND OVERDRAFTS, WHICH IS OFTEN NOT THE MOST OPTIMAL WAY TO FUND THE BUSINESS NEEDS.
explains: “Is the way in which you can access the finance, the way that we talk about the finance, the way the product works and allows great flexibility than some other methods. It’s something we want to continue to evolve and adapt. We want to use the SME customers to refine the product and make it as flexible as we can to support them in different ways.” It’s not just Esme’s offering that is flexible and varied. There is a huge range in the type and size of businesses borrowing from the platform. Turnovers range from £25,000 to over £20 million, while ages range from those in their early 20s to founders in their 70s, 80s and even 90s. The types range from large corporates, manufacturers, retailers, wholesalers, lifestyle businesses and owner-managed businesses. Richard describes these insights as a “real window on the UK entrepreneurship population”.
ENTREPRENEURIAL AMBITIONS Long-running ambitions to start a business existed for both Richard and Lucy. Lucy was, inspired by her parents, and later her husband and sister who have gone on the start their own businesses. Richard’s ambitions were born from a 20+ year career working with SMEs on a daily basis. He said: “I’d gained a lot of knowledge and appetite to want to go out and do it myself, having been around entrepreneurs, small business owners and large business owners. So, when this opportunity came along, it was too good to pass up.” For Veronika, however, her entrepreneurial ambitions are fresh in comparison to her two co-founders. Having admittedly been focused on the corporate world until she left to launch Esme Loans, it was her time spent with small businesses that gave her the inspiration and confidence that she could do it herself. “Through my time with the structured finance team I came across a lot of very successful businesses that have flourished from a good idea and then grew to scale.” She added: “From getting our first customer to the breadth of firms we have supported in the relatively short time we have been open. It’s been a very exciting year of growth in our team and our customers.”
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BUILDING FROM WITHIN
Having seen friends avoid business loans at all costs because of the assumptions they had about them, Esme Loans’ focus is to make the process of applying for a loan as simple and hassle-free as possible. Lucy started: “The reality is that most business lenders still make people go through a very long and difficult process to borrow money. They still ask lots of questions and involve multiple people – making it a really drawn out process. We’ve worked out how to be more agile and flexible than that.” Richard added: “People don’t need lots of different lending products. That just adds to the complexity. When you think about what the customer really wants, a lot of the time that boils down to simplicity. A simple product explained in simple terms.” While ‘not your typical business loan’ means a number of things to Esme, not taking away control of a business from the entrepreneur is a fundamental element, as Lucy explained: “People go into business because they want control. So, we tried to launch a product that allows them to have the utmost control over it. They’re in charge of their finances and of their business. That was one of the fundamental drivers behind the product proposition.” In addition, what makes Esme Loans different, as Richard
Esme Loans is 100% owned and backed by NatWest, though it is a stand-alone digital lender. The trio of founders say they’ve learnt how to combine the rigour and diligence of major High Street banks with the agility and flexibility of an alternative lender. Richard explained what the working relationship with NatWest looks like, and the value of the support the bank has provided. He said: “We’re fortunate enough to have extensive support from within the organisation. We’re able to tap into resources in terms of finance and skills, knowledge and experience. “But we were also left to our own devices to shape, develop and build the business.” And that’s the crucial element of the entrepreneurial mindsets Richard, Veronika and Lucy are bringing to the table. “That’s the fun part,” Richard says, “digging into your own knowledge and skillset, and the ability to reach out into the organisation and external markets. “When you’ve been in the bank nearly 30 years, you think you’ve experienced everything, but shaping the business you realise that you’ve not really experienced anywhere near as much as you thought.” 47