What’s the deal?
ThinCats.com is an online peer-to-peer lending service enabling investors to make loans to direct to businesses.
Businesses seeking funding pay a listing fee of £450 to upload their information. Potential lenders decide whether to participate in an auction to lend to that company. (Kind of Dragon’s Den, eh? Ed.) If they do, they set the interest rate and the amount they’ll offer. A syndicate is made up of the bidders offering the lowest rates.
The minimum bid is £1,000, but the most common loan is around £5,000. (Clearly for pretty small businesses: Ed.)
Is this good?
With ThinCats, lenders set their own interest rates. Some have achieved rates of 15 per cent in recent months, but 8 per cent to 11 per cent is more likely as the marketplace for these loans matures.
Lenders are not charged a fee and it is up to ThinCats to chase any outstanding payments. (This is a USP, if it works: Ed.)
What’s the catch?
The company is young, so it doesn’t have much of a track record. Loans are secured (key info! Ed.); if a business falls behind with payments, ThinCats would call in the loan security. But investors’ money is not as secure as it would be in a bank account.
What’s the alternative?
ThinCats follows on from the success of other peer-to-peer lending sites such as Zopa.com and Fundingcircle.com; but it is the first to offer secured loans.
(and the first, as far as I know, to target small businesses in search of funding, as distinct from individuals: Ed.)
WANT TO KNOW MORE?
Peer-to peer lending
Link to reference the article www.thincats.com
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