OakNorth completes first deal under Help to Grow programme with £600,000 loan
OakNorth – the bank for entrepreneurs, by entrepreneurs – has completed a debt finance deal of £600,000 to Notes, the popular London coffee chain and wine bar concept.
The deal is the first OakNorth has completed under the British Business Bank’s Help to Grow programme since joining in January 2017. The programme aims to provide debt finance of up to £2m to fast-growth businesses and is targeted at filling a £1bn gap in scale up lending.
Launched in 2010, Notes has built a reputation for itself on the quality of its coffee. Regularly named in London’s top 10 coffee shops, its reputation for excellence was further enhanced in March 2015 when the UK Barista Champion won his crown using Notes coffee. It has managed to set itself apart from other coffee chains in the capital through its unique dual concept of being a café by day and wine bar by night. The business now has sites in Trafalgar Square, Moorgate, Kings Cross, Canary Wharf Underground Station, Canary Wharf Crossrail station, and The Gherkin. The business hopes to open a further two sites this year using the debt finance from OakNorth: the first will be Notes’ largest to date – a 1,500 sq ft site in Angel Court, less than a minutes’ walk from the Bank of England. The second will be in Nova, the recently-opened commercial development in Victoria.
The company also supplies over one tonne of coffee per month to third party buyers – independent coffee shops around the UK and Europe. Following increased demand from its webshop, Notes launched a new subscription-based webshop in June 2015 to extend reach into the home-brew market.
After nearly two decades of considerable continued growth, the coffee shop market is one of the most successful in the UK economy and is set to outnumber pubs by 2030. Although leading branded chains continue to expand and enjoy positive like-for-like sales growth, albeit at a slowing pace; it is the small and medium sized boutique chains such as Notes that are gaining momentum and driving comparable sales across the sector. This growth is coupled with the fact that the UK population continues to drink more coffee than ever before with an estimated 2.3 billion cups consumed every year in cafes.
Commenting on the deal, Alan Goulden and Edward Halfon, Directors at Notes, said:
“Between January 2015 and February 2016, Notes grew from two sites to six and we added a central production facility that can cope with up to 14 more sites. We are a very ambitious company that wants to continue scaling at pace, so we’re delighted that we now have the finance enabling us to do that. Like us, OakNorth is an entrepreneurial business that moves quickly – the entire deal was completed in weeks meaning we were able to get back to focusing on our business and firm up plans for our two new sites.”
Ben Barbanel, Head of Debt Finance, and Deepesh Thakrar, Debt Finance Director, at OakNorth Bank, commented:
“We’re delighted to have completed this deal with Notes – not just because it is a fast-growing and ambitious business like ours, but also because it is the first deal we have closed under the Help to Grow programme. This is exactly what the programme was set up for and we look forward to working with the British Business Bank to close additional deals in the future.”
Keith Morgan, British Business Bank CEO, said:
“Help to Grow is a key component of our initiatives to boost growth capital and encourage more scale up lending to smaller businesses. We are committed to encouraging new lending through challenger banks and other new market entrants, and so warmly welcome OakNorth’s first transaction under the programme.”