UK challenger bank Starling Bank, has secured a further £40m in funding, just months after raising £60m.
The fresh capital was supplied by JTC and Merian Chrysalis Investment Company Limited.
With the fresh capital, the bank will further its growth efforts and provide additional support to business customers impacted by the coronavirus pandemic.
The challenger bank has more than 1.4 million current accounts, which includes 155,000 business accounts. Over the past six months it has more than doubled its deposit base and now holds over £2.4bn on deposit.
Starling Bank founder and chief executive Anne Boden said, “This additional funding from our existing investors demonstrates their commitment both to Starling and to our small business and personal customers who need our support now more than ever.”
Since the bank was launched in 2014, the bank has raised a total of £363m in funding. The bank raised £60m back in February also coming Merian Global Investors and JTC.
Last month, the bank was approved by the British Business Bank to serve as a lender of the government-backed Coronavirus Business Interruption Loan Scheme (CBILS).
The scheme enables the bank to grant term loans between £5,000 and £250,000 to British SMEs that are struggling financially because of the coronavirus pandemic. Those accepted will see the first 12 months of interest and arrangement fees paid by the UK government.
However, Starling came under fire earlier this month after around 2,900 business owners saw their applications declined.
The coronavirus has caused havoc with a lot of businesses and many were relying on these loans to help them get through. Many took to Twitter to express their disgust.
“[You] are like the ice cream man with his chimes on, only to find out he’s got no Mr Whippy to sell only ice pops but to get the ice pop you have to sing the National Anthem backwards. Then he tells you he’s ran out of ice pops,” one rejected business owner wrote on Twitter.
The bank issued a response to its rejections, stating that “The decision to decline these applications was not taken lightly.” Boden said that key to the decision was that businesses could not apply for a loan under the scheme with another bank while they were still being processed “and therefore, we felt we should decline as quickly as possible all applications that we were unlikely to accept.”
This was not enough and Twitter users continued to express their outrage at the bank declining so many applications. Following the aftermath, the bank stated it would look into what else it can do to help resolve some issues.
In a Tweet it said, “Hi everyone, we want you to know that we’re listening. We know some of you are frustrated, and lots of you have questions about the BBLS. So we’re currently working with the scheme authorities to get some guidance on a way forward.”
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