Warrington Borough Council is set to own a 33% share in a new challenger business bank, investing a total of £30m.
The council will form a partnership with Acorn Financial Partners (AFP) which has recently submitted a banking licence application to the Financial Conduct Authority and the Prudential Regulation Authority.
Once authorised, AFP will be renamed Redwood Bank.
The council's executive board approved the proposals to own the 33% share on 16th January and will invest an initial £10m, with the view to invest a further £20m over the following two years.
AFP hopes to open Redwood Bank later this year where it will offer business finance and have its northern regional office in Warrington.
The bank will look to support local businesses and target secured lending to SMEs, both local and nationally, to help drive economic growth in the region.
“In Warrington, we are doing everything we can to support the local economy and help businesses thrive,” said councillor Russ Bowden, executive board member for corporate finance.
“It's an important part of securing a better future for the borough
“These proposals are part of this wider work.
“It's about us doing things differently and using innovative financial approaches to support growth and sustainability in Warrington.”
To mitigate risk, the council will review the business plan each year before investing the further £20m over the next two years.
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Sainsbury’s Bank withdraws all base rate tracker products
Sainsbury’s Bank has removed all of its base rate tracker mortgage products with immediate effect...
Leek United extends mortgage offer period
Leek United Building Society has announced that it has doubled the offer period on its mortgages from three to six months...
STB strengthens real estate finance division
Secure Trust Bank (STB) has announced the appointment of Chris King (pictured above) and Andy Thomson to lead the company’s real estate finance division across London and the South East...
CYBG and Virgin Money agree takeover offer
The boards of Virgin Money Holdings (UK) PLC and CYBG PLC have agreed the terms of a recommended all-share offer to be made by CYBG for Virgin Money...
UTB extends max loan size on second charge mortgages
United Trust Bank has increased the maximum loan size on its second charge mortgages from £250,000 to £400,000...
BBB launches online information hub
The British Business Bank has introduced an online hub that provides information regarding the finance options available to scale-up, high-growth and potential high-growth smaller businesses...
Metro Bank updates mortgage rates
Metro Bank has refreshed the rates across its residential, buy-to-let (BTL) and large loan ranges...
Our response to the Treasury committee's SME finance inquiry
Earlier this year, the Treasury committee launched an inquiry into SME finance looking at a number of issues...
Anthony Browne joins Coconut board
Coconut – the smart current account for freelancers and the self-employed – has appointed Anthony Browne (pictured above) to its board...
Cambridge & Counties to launch new products and expand UK reach
Specialist bank Cambridge & Counties has revealed that it aims to cover the entire country within the next few years, as well as expanding its product suite...
OakNorth provides £7.3m loan to luxury hotel chain
OakNorth has completed a £73m loan to Z Hotels, bringing its total lending to the hotel group to £225m...