Online marketplace lending platform for secured business loans ThinCats is laying claim to having listed Europe’s largest ever non-property peer-to-peer loan on its website. The £3.5m loan has been issued to LAMP, an insurance group focusing on International Healthcare, Legal and Special Lines of insurance worldwide.
Founded in 2011, ThinCats helps businesses to access loans ranging from £100,000 to £5m. Rates are determined by the marketplace via an auction processes. There are two types of auction: a ‘Fixed Rate’ auction, where the borrower offers a single fixed interest rate and the loan is filled on a first-come-first-served basis, and a ‘Variable Rate’ auction, where each lender decides the amount they wish to lend and the interest rate they require.
Last December, ESF Capital – an institutional P2P accelerator business – acquired a 73.4% equity stake in ThinCats. For a number of months prior to the acquisition, the company had been supplying lending capital to the ThinCats platform, with the long-term plan of acquiring a controlling stake in the company.
ESF Capital will underwrite the LAMP deal, with Capital Engine – a firm that provides term loans to UK businesses – acting as a sponsor, structuring the loan for ThinCats and investing half of its arrangement fees into the loan. LAMP Group will use the money to consolidate existing debts and cover costs as it prepares for a round of equity fundraising.
“LAMP is a well-established business with a significant market presence. This shows that P2P lending in general – and ThinCats in particular – is beginning to vie with traditional lenders as a mainstream provider of capital to increasingly large companies. We expect to see an upward trend in both the size and variety of deals as more businesses discover the benefits of financing through P2P lending.”
ThinCats is calling the loan the largest ever non-property loan issued to an SME by a P2P platform. The LAMP deal seems to have ousted from the top spot a loan issued by ArchOver to the healthcare company Duradiamond Healthcare in March. The loan, worth £2.3m, was then billed as the largest non-property related working capital facility ever raised by any platform anywhere in the world.
Christopher Rothschild of Capital Engine offered his thoughts:
“This transaction shows that ThinCats is maturing into a marketplace where established businesses can raise structured term debt on attractive terms. We are keen to identify more good borrowers and make further inroads in the underserved SME loan market by structuring loans which enable borrowers to achieve their aims while also offering good yield investments to lenders.”
Now in its sixth year, the AltFi London Summit returns on 18th March 2019 to 155 Bishopsgate. Last year proved to be a crucial turning point for the key players building the future of finance. Leading platforms launched oversubscribed IPOs, digital banks proliferated and mainstream financial institutions started their own disruptive propositions. With 2019 certain to be another landmark year, more questions will be asked by regulators with investor interest in disruption also poised for more rapid growth.