Fast growing peer-to-peer lender in the SME sector, ThinCats Australia is weighing up options to expand its solid base of 203 lenders and over 80 borrower referral sources, through a private placement, direct trade investment in the group and a potential IPO.
Launched in December 2014, ThinCats Australia is 25% owned by ThinCats UK, one of UK’s leading peer to peer lender to SMEs, which has just completed loans worth 115 million pounds and recently attracted 50 million pounds in loan funds from a leading European hedge fund.
ThinCats Australia is now in discussions with a range of credit unions, private equity funds and accounting firms, who wish to enter the growing peer-to-peer lending sector through a strategic alliance with the company.
As an online lending platform, ThinCats connects wholesale investors with SME borrowers across Australia, capturing a customer segment not optimally serviced by bank and non-bank financial institutions.
According to the CEO of ThinCats Australia, Sunil Aranha, the platform is attractive to lenders as it provides access to a new fixed income asset class with higher returns and risk mitigation through secured fractional lending to multiple businesses, and borrowers are able to tap into a new funding source at rates lower than that demanded by traditional lenders.
ThinCats Australia has delivered its initial set of loans at interest rates ranging from 11.5% to 14% with monthly principal and interest repayments, to diverse businesses including a stone importer for the building industry, commercial solar energy systems supplier and an industrial and commercial auctioneer. These rates reflect the strength and experience of the borrowers concerned.
“We are in deep discussions with a number of parties about our platform, which specifically targets the more than 2 million of SME businesses whose incremental financial needs are often ignored by the big lenders,” Aranha said.
“We have already found a good niche with this segment of the SME market, and expect to build our portfolio of loans quickly to capture a relevant share of an estimated $12-15 billion market as more sophisticated and wholesale investors discover the potency of our platform.
“We are also generating a lot of interest from finance brokers, who will be rewarded as they bring loans to the platform, and we are actively considering an expanded loan offering as well as higher interest rates to price for any perceived additional risk.”
The global market for peer-to-peer lending is currently worth over $8 billion and doubling in value every year, as the concept gains broader understanding and acceptance.