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ThinCats is an online peer-to-peer lending platform that allows experienced investors to make secured loans directly to businesses, bypassing banks. Lenders bid on online auctions to loan money to business borrowers. Since launch ThinCats has facilitated over 120 loans providing funds of over £25 million to businesses. They have over 1600 lending members as of June 2013.

History
Thincats is a trading name of Business Loan Network Ltd and was launched in 2011. It was set up to help meet demand for funding generated largely by the withdrawal of the banks following the banking crisis of 2008. By its second year of trading ThinCats had been doubling its business every six months.

The Platform
Membership of ThinCats is free and there are no fees for lending. Members sign up via the website and once they are members can view auctions and the documentation related to the loan. There is a Q&A facility where members can ask questions relating to the loan. This has been referred to as ‘crowd due diligence’ by the Managing Director, Kevin Caley. Members can bid an amount and choose the interest rate either using a fixed or dynamic bid. Dynamic bidding gives the member the chance to choose a maximum and minimum interest rate. The site then adjusts the bid accordingly to try and keep the lender within the auction without them having to sit by the computer to do so. The minimum bid on the platform is £1,000.

ThinCats uses a network of sponsors to prepare loans for the platform. The sponsors are former bank managers and financial experts who vet applications, and monitor their progress subsequent to the loan being drawn down. If there are problems with a company the sponsor has a personal connection with the borrower and is able to pursue the repayment of that loan.

ThinCats’ Secondary market was launched in January 2013. This allows lenders to sell parts of their loans (if the loan is considered suitable for sale) if their circumstances change and if they need their funds back quickly without having to wait for the end of the loan.

Returns
ThinCats advertise returns for lenders between 6.5% and 16.8%. By the end of 2012 lenders were earning an average of 11% interest.

Lending via a pension fund
ThinCats can be used for personal pension investments such as SIPPs. This should be considered by experienced investors only, as it requires lenders to make their own decisions, read the documents themselves and make decisions about the kind of interest rates they require.

Regulation
In December 2012 the UK Government announced that it was intending to regulate the peer-to-peer and crowdfunding industry from 2014. A consultation document was published in March 2013 and the FCA expect consultation to run through autumn 2013 with the final rules being published in 2014. The FCA are considering giving firms an interim period to implement the changes.