ESO Capital, Waterfall Asset Management and other institutions to fund loans via secured peer-to-peer firm.
ThinCats, a P2P firm which is owned and operated by ESF Capital, has announced a £200m funding programme for UK SMEs. £30m has already been committed and deployed by ESO Capital (ESO is a separate company, but its CEO Alex Schmid is ESF's Chairman). Waterfall Asset Management has contributed £70m, which is yet to be deployed. The balance will be provided by Waterfall and other institutional investors, subject to certain conditions.
The money will be lent to UK SMEs via the ThinCats platform. The secured loans will range up to £5m in size. The programme will focus on growing companies with asset backing and steady cashflows, as well as on acquisition finance, spanning all regions and sectors in the UK.
In addition to its existing base of individual investors, ThinCats hopes that the £200m programme will provide certainty of capital to business borrowers.
“This additional investor base will allow us to significantly increase funding for small businesses’ expansion, acquisition or refinancing plans,” said Damon Walford, chief development officer at ThinCats. “Our focus on providing amounts up to £5m based on assets and reliable cashflows means we occupy a space where traditional providers ‘can’t work’ rather than ‘won’t work’.”
Walford is quite right that P2P firms in the small business space have tended to focus on smaller loans. One or two, such as early Innovative Finance ISA mover Crowdstacker, have been trying to make inroads in the market for larger loans, but few have scaled such a proposition.
ThinCats has lent a little over £250m to date, according to AltFi Data. Ravi Anand (pictured), managing director of ESF, described the £200m programme as the first key initiative in ESF’s plans to “provide significant funding to the UK SME market”.
AltFi is returning to Amsterdam for its second annual Summit in the city. The inaugural event last year was a roaring success, with key figures from across Continental Europe's alternative finance and digital banking sectors highlighted. These included Jeroen Broekema, managing director of Funding Circle Netherlands, and Mieke van Engelen, head of innovative partnerships at ABN AMRO's standalone lending platform, New10.