By Mohith Sondhi, Managing Debt Finance Director, OakNorth

One of the most common objections I hear about OakNorth is that we’re expensive. It usually comes second-hand, from a broker who’s had the conversation or a CFO who’s compared our numbers with a high-street term sheet. 

And on margin alone, they may be right. OakNorth isn’t always the cheapest lender in the market. 

But expensive compared to what? A high-street facility with a more standardised structure? Private credit priced considerably higher? A lender that can offer attractive headline pricing but can’t meet the timetable or structure the deal requires? 

Price only tells you something useful when you’re comparing equivalent options. In mid-market lending, they often aren’t equivalent. 

OakNorth sits between traditional high-street lending and private credit. We combine the flexibility and structuring associated with private credit with the funding model of a bank. That means we can move quickly, underwrite complexity and build facilities around individual businesses, while typically pricing inside private credit. 

We’re not the cheapest option, and we don’t try to be. The more useful question is what you get for the difference. 

Bespoke and off-the-shelf aren’t the same thing 

Think about buying a suit. You can buy one off the shelf at an attractive price, or go to a tailor who takes the time to understand exactly what you need and makes something around you. The first option is cheaper, but it isn’t the same product. 

The same principle applies to lending. Traditional lending models often rely on more standardised structures, covenants and credit processes. That can work well for businesses and transactions that fit those parameters. But some deals don’t. 

A business might have a complex structure, a tight transaction timetable or a growth trajectory that historical accounts don’t fully capture. In those circumstances, headline price becomes only one part of the decision. 

Our approach to bespoke business lending is to understand the business and build the facility around it: its cash flow cycle, deal structure and realistic path to repayment or exit. 

That can cost more than a standardised facility. We’re upfront about that. But for ambitious businesses using debt to fund growth, acquisitions or other significant transactions, the value created by getting the right capital in place can outweigh the difference in margin. 

Speed changes the economics 

Comparing rates alone can also overlook the value of execution. 

A borrower that can credibly commit to a quick close can be in a stronger position when negotiating an acquisition or competing for an asset. Funding certainty can influence the price it achieves, the terms it can negotiate and whether a vendor sees it as a credible counterparty. 

As PEM Corporate Finance noted in its 2026 mid-market review, debt in the mid-market is no longer just about price. Certainty, speed and structure matter too. At OakNorth, we can fund within weeks rather than months. 

That mattered when the Arora Group needed £50 million of liquidity at a pivotal moment for the business. For Surinder Arora, the priority was having the flexibility to act when opportunities arose. 

As he put it: “This loan from OakNorth Bank provides us with the liquidity to take advantage of these opportunities and focus on playing for the upside, when many others will be distracted trying to protect the downside.” 

In that instance, the value of the financing wasn’t simply the interest rate. It was having capital available at the point the business could put it to work. 

You meet the people making the decision 

Structure and speed depend on how decisions get made. 

At OakNorth, borrowers can present directly to our Credit Committee. They can speak to the people making the decision, answer questions directly and understand what matters to the credit process. This creates a more transparent conversation, reduces unnecessary back and forth and helps us get to the right decision faster. 

But that direct relationship isn’t just about getting a deal done. It helps us build a deeper understanding of the business, its ambitions and the challenges it may face along the way. For borrowers, that means working with a lender that understands where they’re heading – not just the transaction in front of them – and can support them as their financing needs evolve. 

That relationship-led approach is reflected in our track record. Over the last decade, we’ve lent more than £15.1 billion to businesses across the UK and US, supporting more than 70,000 jobs, with credit losses of 0.045% of cumulative principal. More than 80% of our new lending now comes through referrals, repeat customers or our network. For us, that’s a strong indication that borrowers and advisers value not only what we can deliver, but how we work with them. 

So, what should borrowers compare? 

The right lender depends on the deal. For a straightforward transaction with stable assets, plenty of time and a structure that fits conventional lending criteria, a lower-priced high-street facility may be exactly what a business needs. However, this comparison changes when a transaction requires more. 

If you’re assessing competing funding options, look beyond the headline margin and ask: 

  • Can the lender structure the facility around the transaction? 
  • How much certainty do you have that the lender can deliver? 
  • How quickly can they make a decision and provide the capital? 
  • Can you speak directly to the people making that decision? 
  • What restrictions or covenants come with the facility? 
  • What could delays or an unsuitable structure cost the business? 

Those questions will give you a better picture of commercial lending value than margin alone. 

I know OakNorth won’t be right for every transaction. But for businesses that need genuine underwriting, fast execution or a structure built around their circumstances, comparing lenders purely on price misses much of what matters. 

The cheapest capital isn’t necessarily the capital that creates the most value.