P2P lending tops crowdfunding table

It has quickly become the most popular lending model in alternative finance, accounting for three quarters of all money lent in the crowdfunding sector.
                                                       
ThinCats, a platform where investors can hand pick the business they want to invest in, has lent a total of £82 million to UK businesses, with manufacturing proving the most popular sector. Over 25% loans on the platform are to UK manufacturers, compared to a national average of 23%.

Sophisticated lenders using the ThinCats’ platform have an average of £52k invested on the platform, which is over six times the sector average of £8k. The average borrowed by business is also much higher. SMEs accessing finance through ThinCats will borrow an average of £320k, four times the national average of £73k.

A recent report on the alternative finance sector, from NESTA and The University of Cambridge, found that four in five peer to peer business investors see it as important that they have control over where their money goes. ThinCats unique lending model, whereby investors handpick not just the sector, but the business that they want to invest in, allows lenders to select individual businesses which have been vetted and brought to market by a business sponsor.

ThinCats has offered £82 million in secured loans to UK Businesses since its establishment in 2011, and offers an average return of over 10% to lenders. Furthermore, as ThinCats only offer personally selected secured loans, investors have the unique opportunity to invest some of their pension through a SIPP, which is advantageous when it comes to taxable returns. The anticipated inclusion of peer-to-peer in its own ISA wrapper in 2015, is also set to increase lending in the sector significantly.

Kevin Caley, Managing Director and Founder said:

“Peer to peer lending is fast becoming a well-established SME lending vehicle in a stifled traditional lending environment, which has seen lending to SME’s fall £700m for the first quarter of the year2. Peer to Peer lending is going from strength to strength and is currently running at just over £1bn per annum. To keep this momentum we must continue to demonstrate, to investors and SME’s, that P2P is a sustainable and fair way to lend and borrow. We started ThinCats to get a fairer deal, for both investors who have been downtrodden by low interest rates and UK SMEs who have been shunned by the big banks. Our focus is on growth for investors and growth for established UK SME’s but most importantly a fair deal for both.”