The bank is aiming for a summer launch, with distribution planned mainly through a panel of selected brokers which is yet to be established.
Gary Wilkinson, chief executive, Redwood Bank, said: “We are well on track to open to customers later this year with a proposition built on competitive rates, superior service and straightforward products.
“We will only be lending to SMEs. We will lend to owner occupied commercial customers, secured on their commercial property, or experienced landlords who are business owners. This could either be secured on a residential or commercial property.”
The bank will also provide business deposit accounts.
Jonathan Rowland, co-founder of Redwood Bank, said: “Securing a banking licence by the PRA and the FCA underlines the strength of our business model and the calibre of our experienced management team. With the opportunities being created by Brexit and the financial services sector’s rehabilitation, this is a great time to be entering the market.”