Most banks chase the same customer. Allica Bank went looking for the one everyone else had stopped serving.
Established SMEs, the plumbing firms, the manufacturers, and the family businesses with 20, 50, 150 staff had become too big for app-only banking and too small to get a relationship manager at a high-street branch. Allica built a bank around that gap. Three years after opening its doors, it turned a profit. Two years after that, it was named the UK's fastest-growing fintech and had crossed £3 billion in lending.
So how does Allica Bank make money? The short version: relationship-led lending, a deposit base built through its Allica Bank business account, and, from 2025, a new embedded finance arm. This piece covers how Allica Bank makes money in full the four lending lines, the Business Rewards Account, the Kriya acquisition, the profit numbers, and whether Allica Bank is safe enough to trust with your business's cash.
Relationship banking for a segment the majors ignore
Allica Bank makes money primarily through interest income on business lending, supplemented by deposit margins from its business account and, since October 2025, embedded finance fees from its Kriya acquisition. Understanding how Allica Bank makes money starts with understanding who it refuses to serve: it is a British challenger bank built for established small and medium-sized businesses, typically those with 5 to 250 staff, not for consumers or micro-businesses.
The model is old-fashioned in the best sense. Every customer gets a named relationship manager with real banking experience, backed by proprietary technology rather than a call-centre queue. The Allica Bank business account sits at the centre of that relationship, pairing everyday banking with the same manager who handles a customer's lending. Allica received its full banking licence from the Prudential Regulation Authority in 2019 and launched to market in March 2020 right as the pandemic hit. It has been building distance from the app-only pack ever since.
The established-SME gap Allica was built to fill
Allica targets businesses with over five to ten employees or at least £500,000 in annual turnover, companies too complex for consumer-style banking apps, yet too small to warrant a dedicated team at a high-street bank. This is the deliberate middle Allica's business model was built around, and it's the real answer to how Allica Bank makes money at all: by refusing to compete for the customers everyone else already fights over.
The scale of the gap is the story. Established SMEs make up over 30% of UK jobs and GDP, according to Allica's own submission to the Treasury Select Committee, yet they've been left with poor savings rates, account fees, and call-centre queues instead of a banker who knows their name. Allica's leadership has been blunt about the discipline this demanded: rather than chasing "shiny opportunities or speculative growth strategies," the bank stayed relentlessly focused on this one customer segment, betting that sustainable growth would beat hype.
Four Ways Allica Lends and Where the £3.7bn Comes From
Allica Bank's lending book runs on four organic product lines: commercial mortgages, asset finance, growth finance, and bridging finance, sourced heavily through a broker network. This is where most of the answer to how Allica Bank makes money actually lives lending is the primary revenue engine, not the current account.
Commercial mortgages cover loans from £150,000 to £10 million, at up to 80% loan-to-value, with terms of 5 to 25 years. Asset finance launched in 2021 and had grown to over £427.8 million in balances by early 2025, up 41% year-on-year, with applications running at over 750 a month, up from 450 in 2022. Growth finance is the newest addition, a flexible product for scaling businesses. Bridging finance arrived through acquisition rather than organic build Allica bought bridging specialist Tuscan Capital in August 2024 to add semi-commercial and full-commercial bridging expertise.
Add it up and the numbers move fast. Gross new lending climbed 47% year-on-year to £1.3 billion in 2024, pushing total loans and advances to £3 billion up 54% in a single year. By the end of FY2025, Allica's total loan book had reached £3.7 billion, up 23% again, with growth across every lending line.
Deposits and the Allica Bank Business Account
Allica Bank funds much of its lending through deposits gathered via the Allica Bank business account, known as the Business Rewards Account, which pays up to 4.08% AER on its linked Instant Access Savings Pot with no monthly fee for qualifying balances. That single product has become the engine of Allica's deposit growth and a second pillar of how Allica Bank makes money, alongside lending.
The account requires £50,000 to open and 12 months of incorporation Allica doesn't accept sole traders, and it isn't trying to. Customers get cashback of 1% to 1.5% on qualifying card spend, integration with Xero, Sage, FreeAgent and QuickBooks, and, again, a relationship manager attached to the account. Customer numbers have scaled fast: from over 2,000 by the end of 2023 to more than 6,000 in 2024 to over 14,000 active customers in FY2025 more than double in a year.
Deposits followed the same curve. Customer deposits rose 68% to over £4 billion in 2024, then climbed a further 29% to £5.7 billion in FY2025. Every business account signs up a customer whose deposit funds a loan somewhere else in the book that's the whole loop.
Kriya: Allica's First Step Into Embedded Finance
Allica Bank moved into embedded finance by acquiring Kriya, the SME working capital and PayLater fintech formerly known as MarketInvoice and MarketFinance, in an all-share deal that was completed on 20 October 2025. It was Allica's third acquisition, following Allied Irish Bank's GB SME lending book in 2021 and Tuscan Capital's bridging business in 2024.
Kriya brought scale and a genuinely new product line. Founded in 2011, it had processed over £4 billion in SME finance across more than 300,000 transactions, with an embedded PayLater product already integrated with retailers including Halfords and built on a Stripe partnership. Kriya keeps its own brand and its CEO, Anil Stocker, who put the logic plainly: "Combining forces with Allica gives us the right platform to scale what we've built." Financial terms of the deal weren't disclosed.
The ambition attached to it is specific: Allica is targeting £1 billion of working capital finance to SMEs over the next three years through the combined business, part of a wider push to capture 10% of the established SME market by 2028.
Three years of profit and what's funding the next phase
Allica Bank turned its first full-year profit of £16.1 million in 2023, just three years after opening for lending, then nearly doubled it to £29.9 million in 2024, and grew it again to an underlying £43.7 million in FY2025 a third straight year in the black. Revenue kept pace: gross revenue reached £293.1 million in 2024 and £371.3 million in 2025.
None of this happened without serious capital behind it. Allica has raised roughly £503 million across six funding rounds since 2020, backed by Warwick Capital Partners, Atalaya Capital Management and TCV, culminating in a $155 million Series D in February 2026 that pushed Allica past unicorn status at a $1.2 billion valuation. That funding, plus the deposit base the Allica Bank business account has built, is what's underwriting the next phase: the Kriya integration, continued lending growth, and a stated ambition to expand internationally.
FAQs
1. How does Allica Bank make money?Allica Bank makes money mainly through interest earned on its lending commercial mortgages, asset finance, growth finance and bridging finance plus the margin between deposit rates and loan rates, and, since October 2025, fees from Kriya's embedded working capital and PayLater products. Lending is sourced heavily through broker relationships rather than direct marketing.
2. Is Allica Bank safe to use for my business?Yes Allica Bank has held full authorisation from the Prudential Regulation Authority since 2019 and is regulated by the FCA, with all current and savings accounts covered by the Financial Services Compensation Scheme up to £120,000 per business. Is Allica Bank safe compared to e-money providers? Its statutory deposit protection puts it a level above firms that only offer safeguarding arrangements.
3. What makes Allica different from Monzo or Starling?Allica targets established SMEs with roughly 10 to 100+ employees, a segment both Monzo and Starling largely leave to focus on sole traders and micro-businesses. Where Starling and Monzo run mobile-first, largely self-service current accounts, Allica pairs its business account and lending products with a dedicated relationship manager as standard.
So, Does the Model Work?
That's the honest answer to how Allica Bank makes money: by lending carefully to businesses it actually understands, and funding that lending with deposits it earns through a genuinely useful business account. Add Kriya's embedded finance into the mix, and the picture is a bank stacking three separate income streams on top of a segment nobody else wanted.
Three years to profit, three straight years of growth since, and a unicorn valuation to fund what comes next the numbers suggest the bet on established SMEs has paid off. Whether that holds as high-street banks start fighting back for the same customers is the next chapter.
Also Read: The Founder Burnout Problem the UK Startup Ecosystem Still Hasn't Solved
Sources: Data drawn from Allica Bank's own press releases and annual reports (FY2023–FY2025), Companies House filings, the FCA Financial Services Register, Wikipedia (cross-checked against FT and press sources), and trade coverage from Mortgage Solutions, FinTech Futures, FStech, Tech.eu, City AM and International Accounting Bulletin. Figures reflect the most recent available data at the time of writing.
The EP+ Editorial Desk covers UK startups, founder stories, and venture capital. All editorial content is independently produced and human-reviewed before publication.
