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.
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