ThinCats (trading name of Business Loans Network Ltd) is a peer to peer lending platform that connects investors with UK businesses and launched in 2010. Investors are required to manually select the loans they wish to invest in, gaining exposure to corporate businesses across multiple industries and regions in the UK. Specialist ‘Sponsor’ ESF Capital helps evaluate, approve and underwrite borrowers on the ThinCats’ platform.
Risk and Security
The principal risk is borrower default. As investors are required to manually select loans, their exposure may be very limited. This means a default could significantly impact their overall investment. All loans are secured against realisable assets that can be liquidated in the event of a loan default. ThinCats applies a Credit and Security grading to each business, demonstrating the likelihood of default and level of security coverage.
In the event of a default or the business entering into insolvency, ThinCats will engage independent professional advisors such as property and chattel asset agents, solicitors, reporting accountants and insolvency practitioners. The recoveries process is dependent on the complexity of the situation which may result in it taking longer to recover the assets and return funds to investors.
Investors who wish to transfer uncommitted funds can send ThinCats a withdrawal request through the ThinCats system and funds should be returned within 3 working days. Investors can sell loan parts on the ThinCats Secondary Market for a 1% fee of the capital outstanding on the loan part. The ability to sell loan parts is dependent on new investors substituting the loan commitment, which is not guaranteed. Some loans are not eligible to be sold on the Secondary Market, such as Community Chest Loans which are unsecured. Investors should take this into consideration when investing.
If ThinCats were to become insolvent, plans are in place to ensure loan repayments continue unaffected. ThinCats maintains a Clients Money Resolution Plan which exist to support an insolvency practitioner in such an event.