Cashplus, which was launched in 2005, is a financial technology firm that offers digital current accounts and lending to small businesses and consumers.
The company was granted a full banking licence by the Bank of England earlier this month, enabling it to lend its 500 million pounds of amassed deposits for the first time and reduce its cost of funding.
Rich Wagner, CEO of Cashplus, told Reuters the company's board had approved the fundraising plan at the end of last week and he was looking for equity from growth investment firms.
It would mark Cashplus' first outside investment, aside from backing from its main shareholder Trident Capital, a California-based private equity firm, which has stumped up 20 million pounds to date.
Wagner said the bank was aiming to deliver 1 billion pounds of new lending within five years, after lending 640 million pounds to date.
Cashplus faces an increasingly crowded market, with newer fintech rivals such as Starling and Monzo expanding into business banking, alongside specialists like Tide.
Wagner said Cashplus' longer track record would give it a competitive advantage and unlike rivals the firm had made an operating profit for nine straight years, although it made pretax losses in the last two years on higher investment costs.
He said he was undeterred by the potential for higher loan defaults as the company looks to expand in an economy hammered by COVID-19 lockdowns.
"The credit profile of our customers is quite unique. We are seeing individual directors who are formulating business ideas as a contingency against losing their job," he said.
"Start-ups are already at record highs and we expect they will grow from there."
($1 = 0.7200 pounds)
(Reporting by Iain Withers and Anna Irrera. Editing by Mark Potter)
By Iain Withers and Anna Irrera