Manchester-based Bank North is winding down its operations with immediate effect.

The neobank, which was targeting the SME lending market, made the decision after failing to raise the £30 million needed to secure a full banking licence from the Bank of England.

After raising £20m last year as well as completing a £2m round of funding on Crowdcube, it received a restricted banking licence from the UK Prudential Regulatory Authority in August 2021.

“Many of us had put our heart and soul into making Bank North the success it was – a specialist lender to support UK SMEs,” co-founder Richard Baker, who also launched Metro Bank and Atom Bank, wrote on LinkedIn.

“The inability to raise further investment is a disappointment, albeit not unexpected given previous fundraising challenges along with the gathering uncertainty in investment markets.”

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Baker left the day-to-day operations of the bank, founded in 2018, a year ago.

The challenger bank is now in talks with a third party to sell its loan book and transfer its lending team – around a third of its total 60 staff.

“Our first thoughts have to be with the remaining colleagues who are losing their jobs, especially in these uncertain times, many of whom had only joined the business over the last year or so,” added Baker.

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