Home Articles ThinCats secures $30 million to fund more Australian small businesses and start-ups

ThinCats secures $30 million to fund more Australian small businesses and start-ups


Australian peer-to-peer business lending platform, ThinCats Australia continues to grow with 300 lenders in the provision of funds for Australia’s 2.1 million small to medium sized businesses.

The Australian operation has been boosted by a commitment of $30 million in funding for loans to small businesses in the next 2 years, provided by UK partner ESF Capital.

Chief Executive Officer of ThinCats Australia, Mr Sunil Aranha, said “We are targeting $20 million in loans to businesses in our second year of trading, with a projected $100 million to be lent next year. We are now seeking business people who are not interested in putting their homes on the line to fund their enterprises, as most often required by the major banks.

“Many banks in Australia really operate more like building societies as they are demanding property as security, instead of backing their judgement in supporting their small business customers on the basis of their current and future trading performance,” he added.

What exactly does ThinCats do?

The peer to business, online lending platform connects wholesale investors with small and medium sized business borrowers across Australia, capturing an ‘untapped’ customer segment not well serviced by bank and non-bank financial institutions. They even recently reached out to Shark Tank rejects looking for an alternative.

Lenders benefit through higher returns and diversification through fractional lending on secured loans and borrowers have access to medium and long term finance at competitive interest rates, generally between 12 per cent and 16 per cent p.a. compared with other lenders, which are charging up to 1 per cent a day for short term loans.

Mr Aranha said, “There is a real opportunity for peer-to-peer (P2P) lending in Australia as a result of pressure on the major lenders from the Australian Prudential Regulation Authority (APRA) and their traditional aversion to unsecured loans, as well as inability to price small business risk accurately.”

ThinCats has funded 24 loans worth more than $3.1 million to date at interest rates ranging from 11.5 per cent to 15 per cent p.a. to diverse businesses, including a stone importer for the building industry, a commercial solar energy systems supplier, a manufacturer of nutritious superfoods, a carpet contractor, an organic coffee distributor and a wholesale supplier of specialised fuel to metro and regional areas.

The global market for P2P lending is currently worth over $6 billion and doubling in value every year, as the concept gains broader understanding and uptake in mainstream markets.

A new credit tool to ease borrowing

ThinCats Australia has also launched a new credit assessment tool that makes finance applications easier.

Created by local company Othera, the credit assessment tool allows small companies to pre-qualify for loans on the ThinCats platform, as well as allowing its 300 peer to peer lenders make more informed business lending decisions. ThinCats now has access to Othera’s Lender Dashboard to run credit assessments on loans applied for by small businesses on the platform.

According to John Pellew, Chief Executive Officer and Founder of Othera, the typical pre-qualification process takes lenders anywhere from two to four hours. “What makes Othera’s credit assessment tool unique and invaluable to lenders and borrowers is that the complex pre-qualification process has been automated with credit decisioning algorithms yet borrowers require no financial expertise to begin the online process”, he said.

The benefits for borrowers also include the fact that it takes less than five minutes to fill in the online form to pre-qualify for loans, with no requirements to upload documents, resulting in a faster assessment. The Credit Assessment report is delivered to the lender within minutes.

ThinCats’ lenders will also benefit by being able to assess a borrower’s credit quality in a shorter time and more accurately through Othera’s ability to directly access the potential borrower’s accounts. The account data is used to generate the Credit Assessment report and according to Mr Pellew, this report provides lenders with a current reflection of a business’s creditworthiness.

“Rather than relying on official credit rating reports and previous financial year’s tax returns which use historical data, lenders now have access to a Credit Assessment report that is generated from real-time accounting data”, he said.

Mr Aranha agreed and said “the tool will attract more lenders to our platform as it improves the quality of information they base their lending decisions upon. This will make the process of lending more efficient on both sides of the transaction, which is a significant boost to small businesses in Australia.”