Small Business Lending: ThinCats

Small Business Lending: ThinCats
Kevin Caley, Managing Director, ThinCats

ThinCats was founded five years ago as the first P2P lending platform dedicated to secured business loans. The size of the loans ranges from £50,000 to £10 million, with a minimum bid amount of £1,000.

Unlike other platforms that rely on big data for underwriting, ThinCats utilizes traditional relationship banking practices. To date, ThinCats have made 500+ secured loans totaling £130+ million, and it has 1,600 active members.

ThinCats generates a deal flow of £30 million per month but is only able to process about £5 million currently. The company has not invested substantially in marketing, which would help it attract investors to the platform and keep up with their deal flow, Caley noted.

In Caley’s view, the good news for the P2P industry is that the UK market can increase as much as fivefold in 2016 and small business lending will outgrow other sectors.

The bad news is that the credibility of the P2P sector depends on its ability to balance loan supply and loan demand. Since Zopa invented P2P loans 10 years ago, the increased involvement of institutional investors, who demand priority over retail investors, means that P2P lending is at risk of being absorbed into the system and getting lost forever, Caley noted.