The ability to assess credit risk is fundamental for all lenders. It is an intricate mix of art and science, whereby each lender has its own view when determining their appetite to lend and at what price. While there are some commonalities between each lender’s credit risk models, what is deemed a great business by one may appear less attractive to another.
A “secured loan” has historically required that a borrowing company post an asset as collateral, such as equipment or property, to “secure” the capital that a bank loans to them. Given that this is the predominant type of secured loan, SMEs understandably equate the term with a need to own property or specific types of asset. However, there is another important type of secured loan that does not require collateral in the form of physical assets: the cashflow loan.
As a leading alternative finance lender in the fintech space ThinCats has built a regional network of experts based across the UK. Why? Isn’t the whole point about fintech to digitise and automate?
Once upon a time, Britain was a great manufacturing nation. That’s the perception – was. While it’s true that manufacturing makes up a smaller proportion of GDP – 11%, down from about a quarter in the 1970s – what it does, it’s still world class at.
ThinCats recently conducted a survey with corporate financial advisers on the current drivers, restrictions and trends in SME financing in the UK. Join us in this brief article as we collate the survey’s results on the funding market for SMEs, including the notable rise of alternative finance as a means to support SME growth.
Technology companies are the UK’s economic powerhouse, growing 2.6-times faster than the rest of the UK economy. Indeed, the 50 fastest-growing UK tech companies claim an eye-watering 2,176% average growth rate and a combined revenue of £1.2bn, according to Deloitte.
Eating out is a British small business success story. Consumer spending in restaurants has risen over the past five years, reaching £22.5bn in the last quarter of 2018. The number of restaurants and mobile food operators has tracked this upwards, reaching nearly 87,000 in 2017.
Small business growth opportunities are being stymied through lack of capital, research has found . This is exacerbated because many businesses feel they are unlikely to get a loan to fund their growth plans.
The high street bank continues its move from community cornerstone to museum piece – to the detriment of Britain’s small businesses.
2018 was a breakthrough year for ThinCats. Read more about how our investments in people, technology and data helped us fund more UK businesses than ever before and why business advisers are increasingly turning to ThinCats to create the bespoke funding solutions that their clients demand.
In 2018, we launched PRISM Prospect, our predictive data model based on analysis of hundreds of thousands of businesses over 25 years. PRISM Prospect identifies businesses likely o have a funding need over the next 12 months. The model segments UK SMEs into five propensity categories from very likely to unlikely.
Employee ownership is becoming an ever-more popular way for owners to sell their business. In recent months, firms as varied as book producers, landscape gardeners and a niche operation doing luxury conversions of VW campervans have taken the decision to go down the route pioneered by John Lewis. Even shadow chancellor John McDonnell seems to want to get in on the act
When you take out car insurance do you just opt for the first quote you get, very unlikely. The same goes for a mortgage, an investment fund or a pension plan. You shop around via the internet, a broker or an aggregation service
Employee-owned businesses saw a major boost to their popularity once their advantages were enshrined in legislation through the Employee Ownership Trust in 2014. The EOT is a form of employee benefit trust, but with distinctive features and tax advantages.
How the collapse of global finance a decade ago decimated SME lending and catalysed an alternative
The UK’s rapidly expanding small business sector is something of a sleeping giant, with young companies in need of better access to finance to kick-start their growth. In the transition from start-up to scale-up, a critical factor for a growing business is the quality and flexibility of available funds.
At ThinCats, we have a policy of targeting our lending to growing companies. In doing this, we strongly believe that alternative finance is playing a positive role in increasing the productivity of British industry
SME event-driven finance is fast becoming the natural terrain of the alternative finance industry. Before the financial crisis, banks dominated all areas of business lending. Alternative finance meant getting some money from your mum. But things have changed. Regulation over the past decade has forced banks to retrench. In the years immediately after the crisis, net lending to SMEs fell heavily into negative territory.
British industry is caught in a paradox. There has been a severe slowdown in productivity since the financial crisis, despite the world going through what’s been described as the fourth industrial revolution. It’s as if Watt develops the steam engine, Stevenson builds his rocket, Cartwright unveils the mechanical loom and Britain’s rate of growth somehow still slows.
By opening up new flows of capital to UK SMEs, alternative finance is playing an important part in helping UK talent drive improved economic growth. Read our paper on why the UK should care about finding alternatives to traditional bank funding, the benefits to businesses and the future of funding
The banking network is shrinking, and it is bad news for businesses. The good thing is, there’s now an alternative.
Stewart Cazier, our head of retail, was interviewed by Simon Lambert of This is Money on what investors need to know about alternative finance, crowdfunding and the IFISA for the Investing Show.
Just when we had settled into the ‘new normal’ of bargain-basement rates, the Bank of England starts raising them, with a 0.25% rise in November and more could be on the way.
Banking has changed beyond all recognition over the last decade. Many high streets are now with-out a traditional bank as, according to The Times, some 802 branches closed in 2017 alone – a figure that seems certain to accelerate this year.
Amid current fascination with driverless cars, it’s worth considering how far we are from a driverless credit process, as it were – what do algorithms and AI have to offer, and what still requires human consideration?
It’s possible that Edmund Hilary and Tenzing Norgay weren’t the first people to make it to the top of Everest. When George Mallory’s body was discovered on the slopes of the mountain 75 years after he disappeared in 1924, it was apparent he was descending, having been last seen 800 vertical feet from the summit
There used to be a rule of thumb in pension planning, that the percentage of bonds or other income-bearing securities, in one’s pension portfolio should equal one’s age. Things are somewhat more complicated and that, hopefully, has been replaced by more grounded and detailed analyses.
P2P investments can play a vital role in retirement planning. Over the coming months, we will be taking a look at key issues around P2P loans and retirement planning.
From our analysis of the market we anticipate lower average loan rates, along with an increase in loan quality. These linked trends are a confluence of events in the wider alternative finance SME loan market – indeed, debt markets generally – and ThinCats’ own due diligence.
You want to go to cinema, but what to see? Easy – just pick the film with the highest rating. Five stars and you’re front and centre, with super large bucket of popcorn. Western, scifi, romcom, action – doesn’t matter, just so long as it’s got the most stars.