Please DO NOT contact the Business Loan Network directly!
In order to get your opportunity into an online action you must find a ‘Sponsor’ that will be prepared to put their reputation on the line for you and your proposition. These are experienced traditional bank managers and corporate finance advisors who provide a quality check and gateway to make sure that a high quality standard is maintained and that Lenders get all the information they will need to assess the opportunity business before making a bid to lend.
Click here to see information about the Accredited Sponsors.
You can send an email to all of our Accredited Sponsors at the same time telling them about your opportunity by clicking on this link: [sponsors@thincats.com]
Your chosen Sponsor will discuss the proposition with you and make a decision as to whether they are prepared to support your application. They will agree a fee with you that will be paid only on successful completion of the loan.
The selected Sponsor will work intensively with the Applicant to understand their business and because of this commitment the Applicant may not change Sponsor once this work has begun. The sponsor will complete an information pack for lenders including an assessment of the market, the borrower’s track record, strength of management, the purpose of the loan, what security is on offer and the business' ability to make the proposed repayments. The objective will be to try and attract sufficient bids at auction to receive a loan offer at the most advantageous rate. The Applicant will be responsible for disclosing all appropriate information to enable an assessment of the risk to be made and providing detailed warranties to the lenders that the information provided is correct.
When the Sponsor is satisfied the Applicant pays BLN a listing fee of £450 which is refundable if you do not get an acceptable offer of a loan, the information pack is lodged on the website together with full details of the proposed deal including the amount required, the length of the loan and security offered and a guide to the interest rate you are prepared to pay. The auction then begins; Lenders are notified that a new deal is available and may review the information provided and ask any questions they may have for the Sponsor or the Applicant using the Thincats.com messaging service.
The auction will normally last between 1 and 2 weeks and Lenders will be able to offer all or part of the funding required, ranging from a minimum of £1,000 to the whole of the loan. Most lenders select a amount they would like to lend and an interest rate they would like to receive and make a bid. The bidding often starts at rather high interest rates but rapidly decreases once sufficient bids have been attracted to make up the loan. The use of "Dynamic Bidding" exagerates this apparent high interest rate because lenders place a bid by specifying a high rate and tel the computer what their lowest rate would be. The computer then tries to get the best rate for them whilst keeping them in the auction.
When the auction closes, and assuming the bids made exceed the amount being raised, The Thincats software will assemble a lending syndicate from the bids starting with those that offered the lowest interest rate. Each bidder gets the rate that they bid but the Applicant gets offered the average rate plus a ‘margin’ of 1.5% of which 1% pays the costs of running the Business Loan Network and 0.5% is paid to the Sponsor to ensure that they have an ongoing interest in the success of your business.
The borrower then has to decide if the offer is acceptable. Although the money is coming from a syndicate of Lenders the Borrower receives the capital as a single payment and makes a single repayment each month. BLN allocates the payments to each member of the syndicate and co-ordinates the voting of syndicate members if there is a problem and a decision is required.
The Sponsor will work with the borrower to prepare and complete any security required under the loan and pass this to the Business Loan Network for holding or lodging as appropriate. It is the intention that all documentation and security is completed within an agreed (short) timescale and at no extra cost to the Borrower except for the costs associated with security or non standard legal work.
BLN operates a system for allocating repayments to members of each syndicate and keeping a close watch on late repayments. Borrowers will be expected to keep in touch with their Sponsor and provide regular reports and information. This will require a strong financial function in the business. By reporting to the Sponsor you avoid having to give detailed financial information to the members of your lending syndicate because the Sponsor can then send a simple report (perhaps in the form of red, amber or green traffic lights to let the lenders know that everything is under control).
