UK Alternative Lender ThinCats Secures $135M


ThinCats, an alternative lender based in the U.K., has secured up to 100 million pounds ($135 million) in additional funding for small- to medium-sized businesses (SMBs) through an extension of its partnership with Insight Investment.

The company announced the new funding on its website Monday (Feb. 7), saying it was a continuation of earlier participation from Insight, which has been working with ThinCats since 2018. Insight Investment’s managed funds are part of a panel of senior investors — Barclays and Citi among them — deployed alongside ThinCats’ capital.

“Insight has partnered with ThinCats for more than three years and seen it grow from strength to strength,” Shaheer Guirguis, head of secured finance for Insight, said in the announcement.

“During this time, and despite the substantial economic impact caused by the Covid pandemic, our investment capital has continued to provide valuable support to U.K. SMEs while delivering good risk-adjusted returns to our investors,” Guirguis said.

ThinCats managing director Ravi Anand said the new investment will provide crucial support for mid-sized SMBs as they invest in strategies to grow in the wake of the pandemic.

“Adding this new investment to the existing capital of our investor panel, alongside our own funding, means we have 650 million pounds currently available to deploy in support of businesses across the U.K.,” Anand said.

Read more: UK Challenger Bank Helps SMBs Build Credit History and Access Loans

The investment comes at a time when 65% of new businesses in the U.K. are refused credit, which has led to a roughly 6-billion pound lending gap between SMB credit demand and available credit, according to research from U.K. challenger bank Cashplus.

Speaking to PYMNTS last month, CashPlus founder and CEO Rich Wagner said many traditional lenders are missing the opportunity to serve SMBs, based on the — faulty, he says — assumption that these businesses are only looking for large amounts of money.

“Startup entrepreneurs would be very happy with 500 pounds and then once we know that they can pay that 500 pounds, we’re very happy to offer them 1,000 pounds, 2,000 pounds, 5,000 pounds,” Wagner said, referring to their “low and grow” strategy of providing smaller loans until customers show their ability to pay back what they owe.