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ThinCats success story
The kind folks at ThinCats have provided P2P Money with some detailed statistics on the loans they have made to date. ThinCats isn't one of the companies that we mention a lot of at P2P Money as the £1000 minimum investment is probably oustide what most lenders (myself included) could afford. However they now have facilitated £3.6million of loans (with a further 7 subject to contract) and have a growing share of the peer-to-business market. Kevin Caley from ThinCats explained their rational.
You are correct in identifying that we are different because of our minimum £1,000 investment level but this was a deliberate policy because we are NOT trying to attract the 'retail' lender with a few hundred pounds to play with and who doesn't really understand what they are investing in. We are targeting experienced investors with (ideally) at least £10k to invest who have the experience and time to read a detailed Information Pack and make their own investment decision. For this reason we have no plans to lower our minimum bid level. Not all of our lenders are 'High Net worth's'; indeed 14.6% have only invested £1k and 26% have invested £5k or less.
In addition ThinCats are targetting business-to-business lending and pension-to-business lending which have further advantages as Kevin explained.
No consumer credit licence is required. In addition, a company or pension fund does not pay Income tax so the returns are more attractive. A company can offset loan losses against Corporation Tax and a Pension fund gets at least 20% tax relief on loans which makes it a very attractive way to lend.
There are some interesting statistics. The average lender has deposited just under £24,000 which is ten times the £2,400 that an average lender has deposited with Zopa, the leading peer-to-peer provider in the UK. ThinCats currently have 421 lenders compared with around 78,000 lenders on Zopa (although the latter has been around since 2005 !). The minimum invested by any lender on ThinCats is £1000 and the maximum has been £635,000. Around 20% of these funds are from pensions.
ThinCats recently launched their ThinCat bonds through fund manager Innvotec, so they are certainly making new ground, travelling in a slightly different path to Funding Circle and the like, but this must surely be a good thing, and we look forward to reporting on their continuing success.