Investor FAQs

Auction types

What is a fixed rate auction?

A fixed rate auction is our default type of loan auction, where the interest rate has been set in advance. Lenders can place fixed bids in multiples of £1,000, which are accepted on a ‘first come first served’ basis. Once the loan amount has been reached, no more bids can be placed. 

What is a variable rate auction?

A variable rate auction is where lenders can bid at the interest rate they wish to receive, up to the maximum rate set for the specific auction. If the loan amount has been reached, a lender can still bid, as long as they are willing to accept a lower rate than those already in the auction. Once the auction ends the platform will allocate the loan to the bids at lowest rate which make up the loan total. Variable rate auctions allow lenders to place ‘dynamic bids’.

What is a dynamic bid?

A dynamic bid allows a user to set a starting rate of interest and a floor rate of interest. If the bid were to be knocked out of the auction, the system will keep adjusting their rate down until their floor rate has been reached. 


Community & social investments

Does ThinCats offer community & social investments?

We do, but in a limited format. See our community & social investments page for more details.


Complaints

How do I make a complaint?

ThinCats is authorised and regulated by the Financial Conduct Authority (‘FCA’). As an authorised firm it is required to follow FCA’s guidance for complaints handling. We have established a transparent complaints handling procedure which is in line with the FCA guidance.
For information about how to make a complaint please refer to our dedicated complaints section.
 


Defaults & recoveries

What is an event of default?

An event of default is an event which means that a loan is considered as being in default. 

Typical events of default include non-payment of interest or principal, insolvency, misrepresentation or failure to perform any obligation contained in the loan agreement. Individual loans may have different events of default as different conditions are placed on borrowers. The list is often extensive and will be set out in each individual loan agreement.
 

What Does Being In Default Mean?

A loan is considered to be in default if any of the specific conditions of the loan has breached and so an ‘event of default’ has occurred.

Where can I get details on your default rates?

Details of our default rates can be found on our statistics page.

How long does it take to recover funds?

Due to complexity of the process, the enforcement of security may result in a delay in you receiving any recovery of your investment. Additionally, because each case is different, we cannot give an estimate for how long the delay could be. 


Depositing funds

How can I deposit funds into my Client Account?

Following initial registration, we allocate each lender with a unique membership number starting with “BLN-P0”. We contact lenders via email once this number has been assigned with details on how they can transfer money into their client account. It is essential that you quote this membership number in full when depositing funds. Failure to do so may result in a delay in allocating your payment.

If you have lost or deleted this email and need a reminder on how to pay funds into your client account, please contact us at admin@thincats.com.
 

When do deposits show in my account?

Funds are normally available within 2 working hours of receipt.

What happens when I make my first deposit?

Before you make your first deposit we will undertake anti-money laundering (AML) checks to validate your identity and the details of your bank account. Please note this account must be in your own name. You may be required to provide additional documentation to support these checks. It is called a nominated account. If you decide to change the nominated bank account we may undertake additional AML checks. 

Once the AML checks have been passed, your first deposit will be credited to your ThinCats account. Because of this process, your first deposit may take longer to be credited to your account than the time frame stated for regular deposits.

How are my funds held by ThinCats?

All of our lenders’ funds are held in the ThinCats Client Money account, which is a pooled client money bank account held with Barclays Bank Plc. 

 

Diversified Loan Portfolio

What is a Diversified Loan Portfolio (DLP)?

A DLP offers lenders the opportunity to purchase equal amounts of between 20 and 40 underlying loans which have previously been listed on the ThinCats Platform. This offers lenders the potential to create a more diversified portfolio, for the same level of investment, than investing in loans individually. As underlying loans may appear in more than one DLP, it is important to monitor your overall exposure to each borrower.

Do different DLPs hold the same underlying loans?

Underlying loans may appear in more than one DLP, so it is important to research each DLP thoroughly to monitor your overall exposure to each borrower, including any self-select loans that you may also hold.

How will interest and capital repayments be made?

Cash will be passed back to lenders as it is received from borrowers, less the ThinCats DLP administration fee of 1% pa.

How much do I need to invest?

The minimum investment is £1,000 per Diversified Loan Portfolio. Investments must be made in £1,000 lot sizes ie £1,000, £2,000, £5,000 etc

What are the fees for investing in the ThinCats Diversified Portfolio service?

ThinCats will charge an administration fee of 1.0% per annum on the balance of the outstanding DLP. This fee will be deducted monthly from the lender’s cash receipts on the DLP and is in addition to the standard lender fee that applies to lenders who registered after 1 January 2018.

Does the administration fee apply to underlying loans in the event of insolvency?

The 1% administration fee applies to the balance of the outstanding capital of the loans comprising the DLP. If a formal insolvency event becomes applicable to an underlying loan, the administration charge will no longer apply to that particular loan from the point of insolvency. Instead a 1% charge of any subsequent realisation will apply.

Can I invest via an IFISA?

Yes, for new ISA subscriptions only. However, we are not currently able to accept ISA transfers. There are no additional fees for holding a DLP within a ThinCats ISA.

Can I invest at any time?

No. The DLP will be available in specific auctions via the ThinCats platform.

How do I invest and keep track of my investments?

You can invest via the ThinCats platform in the usual way, although you are not able to sell your DLP investment or the underlying loans on the Secondary Market. DLP holdings will be shown on lenders’ dashboards as a single position identified by the DLP title, with the underlying loans performance accessible on the Secondary Market status list through www.thincats.net.

Can I withdraw my investment?

Each DLP will be held for a Target Term, typically two years, as specifically defined in each DLP Information Pack. Shortly prior to the end of the Target Term, all remaining performing underlying loans will be offered for sale via the Secondary Market and all cash realised repaid to lenders. In the event that at the end of the Target Term there is insufficient demand on the Secondary Market, any unsold underlying loans will continue to be held in the DLP. Lenders will continue to receive capital and interest payments on such loans. The proceeds of any subsequent repayments or any realisations from future Secondary Market sales after the Target Term will be paid to lenders as they are received.

Any underlying loans not eligible for sale via the Secondary Market, due to being classified as being unsuitable for trading on the Secondary Market, will be liquidated following the ThinCats recovery processes with realisations being passed to lenders as received.

As a result of the factors described above, a proportion of the DLP could remain outstanding after the end of the Target Term.

It should also be noted that some borrowers may choose to repay their loans early, such realisations will be paid to lenders as they are received.

How does the Diversified Loan Portfolio differ to the standard way of investing in loans via the ThinCats platform?

A DLP provides an opportunity to lend to a greater number of borrowers with a given amount of capital.

Cash from borrowers will be passed to lenders as received, however lenders will not be able to sell DLPs or the underlying loans on the Secondary Market.

What happens if a DLP auction does not fill?

If an auction does not fill, the DLP will continue to draw with the amount raised from the auction allocated equally across the underlying loans.

What happens if a DLP fills very quickly during the auction?

If there is very strong demand, we will aim to issue another DLP as quickly as possible to meet that demand, although the underlying loans and DLP profile are likely to differ.

If I already hold a loan part that is selected as an underlying loan for a DLP, can I still sell my existing loan part?

Yes, if you hold a loan part that is subsequently selected as an underlying loan within a DLP structure, you can sell your existing loan part on the Secondary Market in the normal way.

What are your plans for future DLPs?

We will make DLPs available based on demand from lenders.


Fees

Do you charge any lender fees?

Investors who register after 1st January 2018 will be charged a fee equivalent to a 1% reduction in the annual rate of gross interest received. See our fees page for more details. 

Do you charge any fees for selling a loan on the secondary market?

We charge 1% of the capital outstanding (rounded to the nearest whole pound) of the loan part sold.

Do you charge any fees for recoveries?

Recovery fees of 15% will be charged to the borrower, in the event of the borrower entering into a formal insolvency process. Where there are insufficient realisations from the borrower to repay the outstanding capital, accrued interest, and charge in full, a scale charge will be applied based on the recovery made as set out in the Platform Use and Terms and Conditions (see 17.2.5). This will apply to all loans listed on the primary market from the 1st March 2017. 


Loan Grading

What gradings does ThinCats use?

We have use a two-tiered grading system for all loans on the ThinCats platform:

  • Credit quality, represented by a one-to-five-star grading
  • Security quality, represented by a one-to-five-padlock grading

This provides two ways of judging any loan: the ability of a company to service its loan obligations, and the value of the underlying security relative to the size of loan.
For more information, see our loan grading page. 
 

How reliable are these gradings?

Each component used to construct the credit grade has been subjected to testing against proprietary analysis and the wider UK SME universe – some 3,000,000 firms, of which 500,000 are borrowers. While the grading system has been proven to represent relative risk accurately over multiple data sets, lenders must make their own judgement when lending on the platform. The grades do not represent recommendation of specific loans by ThinCats.

What do the credit grading Stars signify?

The Stars signify the assesed relative likelihood of the borrowing company going into default, and therefore of the riskiness of the loan- five Stars being the highest grading and least risky and one Star the lowest grading and most risky.

What is the credit grading methodology?

This model combines a financial perspective on each borrower, which is driven by leading credit-agency scores, with additional and non-financial proprietary metrics, proven over 25 years of analysis to add an additional layer of insight and predictivity of default. The methodologies used to separately refine both the financial and the non-financial perspectives from the original inputs, and then to combine the two perspectives, have been validated by observing the actual patterns of insolvencies across very large datasets (3m UK firms, of which 0.5m are SME borrowers).

What do the Padlocks signify?

The security grading is represented by Padlocks and is based on the value of assets offered as security compared to the loan amount, at the time of valuation. The highest level of grading (five Padlocks) means that the estimated value of security is more than the loan amount. One Padlock means that the security is estimated to be worth less than 25% of the loan amount. These ratings take into consideration certain industry factors and the ability to recover those assets subject to the security, in the event of a default.

Will the gradings be periodically revised over the loan term?

There are currently no plans to do this.

Will these apply to loans on the Secondary Market?

Gradings are applied to each loan at the time of the original auction. We have no plans, as yet, to periodically update each loan following the initial grading. Therefore, you will see that only new loans will carry the grading and the assessment of loans on the Secondary market will remain as before.

All the safeguards from before are still in place: if ThinCats believes that there is any cause for concern with a loan, we will not allow it to be traded on the Secondary Market. If it is already being traded on the Secondary Market, we will suspend its trading until any concerns are resolved.

All loans (old and new) will continue to be prefixed with a secondary market loan status code. 


Loan types

What loan types (repayment methods) do you offer?

We predominantly offer three different loan repayment methods on our platform:

Amortising – Each month you will receive back a fixed value payment consisting of both interest owed and a repayment of capital.

Interest Only – Each month you will receive back a fixed value payment consisting entirely of interest. At the end of the loan term you will receive back a final interest payment and the return of your invested capital.

Interest Rollup – You do not receive monthly payments. At the end of the loan term you will receive back your invested capital plus all of the compound interest you have earnt over the term.

We sometimes feature loans that offer a combination of these loan types or completely different repayment terms. We recommend that you read each information pack before investing to understand what the repayment method will be.


Loan updates

What is a loan update?

A loan update is when we share information with syndicate members who are part of a specific loan. We communicate updates via email and only send it to current investors of the loan. Loan updates are private and confidential and are strictly between ourselves and the current loan syndicate.

Why do we issue loan updates?

We issue these updates when we have news about the borrower that needs to be shared. Examples of when an update is issued:

  • The loan is to be repaid early
  • A syndicate vote is required
  • The borrower has run into difficulty with repaying their loan
  • There has been progress with the recovery process
Do you give regular updates about a loan?

No, we only issue updates when there is news that affects your investment. We do not provide updates on business performance or progress. 

What is a syndicate vote?

A syndicate vote is when an important decision regarding how to proceed with a loan is needed. When a vote is deemed to be the most suitable way forward, syndicate members will have the opportunity to vote for the best course of action given their own personal circumstances. What we do is explain each course of action and offer investors the opportunity to vote on which course of action they believe is best. Each investor is allowed to vote once and their vote is weighted based on their outstanding capital in the loan. After a period of time the votes are tallied and a loan update is issued with the results of the vote.

Please note that when investing alongside an institutional investor(s), who in aggregate own more than 50% of the loan, syndicate votes will not typically be offered to retail investors. This will typically be the case where an institutional investor has underwritten a loan.

Is there any way to check if a loan update has previously been sent for a loan?

When loan updates are issued the applicable loan Q&A’s will be updated to highlight that an update has been distributed. 

If you do find that a loan update has been issued upon reviewing loan Q&A’s but have not received it, please contact the admin team directly who will be happy to assist. The admin team can be contacted by emailing admin@thincats.com
 


Investment information

What information do you provide for each investment opportunity?

Each investment opportunity on the platform is accompanied by a detailed information pack, which describes the investment opportunity and provides background information about the borrower and its business. This usually includes business plans, credit reports, information on assets available as security for the loan, past account and other document relevant to the opportunity. 

We also grade each investment opportunity on its credit and security quality. See our section on grading for more information.

Can I ask questions about an investment opportunity?

Yes, each investment opportunity features a Q&A facility, which allows investors to ask specific questions or request further information.  


Overseas lenders

Can I be an active member from outside the UK?

Members have to be a UK resident and have a valid UK bank account. However, if you do not meet these criteria you may otherwise be permitted to become a member by written agreement from us in accordance with the Platform’s policy then in force and applicable law and regulation. If you have any questions regarding this please contact account.opening@thincats.com and we will be happy to help. 


Pensions

Can I make loans with my pension fund?

Yes you can, providing your pension provider allows it. For more details see our pensions page.


Regulation

Are you regulated?

ThinCats is authorised and regulated by the Financial Conduct Authority and entered on the Financial Services Register with firm registration number 724062. It is important to recognise that crowdfunding/peer to peer lending is NOT covered by the Financial Services Compensation Scheme. ThinCats is registered with the Office of the Information Commissioner for data protection purposes. 


Repayments

When do payments show in my account?

Payments are collected from borrowers’ account via Direct Debit so that a fixed repayment date can be scheduled for the duration of the loan term. If a payment due date falls at a weekend or on a bank holiday, then the borrower is debited the first working day after the due date, but not before.

Once payments have cleared successfully (next working day following payment date), ThinCats lender’s accounts are credited within two working days.

In the event of being unable to collect payments due to a bank error, the problem can generally be rectified within 3 working days. In this case payments are not usually received until at least day four following the original payment date. Once successful payment is collected, lenders’ accounts are credited in the normal process. 


Risk

What are the risks of lending?

By investing through ThinCats your capital is at risk.  You are making direct loans to corporate businesses, and if for some reason they fail to repay, there is a chance your money will be lost or there will be a delay in repayment. Additionally, your money is not covered for compensation in the event of loss by the Financial Services Compensation Scheme. For more information on applicable risks please see our risks page.


Secondary Market

What can be traded on the Secondary Market?

We do not allow the sale of loans that are in distress, have missed payments against them, are in legal recovery, or have been restructured against an agreed plan. Only loans that are being repaid to schedule without any outstanding questions are free to be traded. A key exception to this are ThinCats Lending Club (TLC) loans, which may potentially contain impaired loans but can still be traded.

Only loans that are status “A” are able to be traded on the Secondary Market.
 

Where can I find the status of a loan?

The status of a loan can be viewed in the Secondary Market Status List spreadsheet. This can be found via www.thincats.net. If you have not logged in before and require a password, please contact admin@thincats.com and one can be provided. From here you will see a link to ‘View Documents’, where additional information is available to members who have funds on the platform. The spreadsheet can be found in the Secondary Market Information folder. This is a document containing information about all loans made on the platform including status codes of each loan.

What happens if I list a loan part that is unable to be traded?

A member of our admin department will email you explaining why your loan part is unable to be sold, and will return the loan part to your account.

What happens if a loan that is listed on the Secondary Market becomes untradeable?

If a loan becomes untradeable, all of its loan parts that are listed on the Secondary Market will be returned to the seller and any pending transfers will be cancelled. 

Will I be charged a fee for buying and selling?

Sellers: 1% of the capital outstanding (rounded to the nearest whole pound) of the loan part upon successful transfer

Buyers: No fees involved
 

Should I sell my loan part as a Variable Rate or Fixed Rate?

Selling at a fixed rate means that the loan is sold at its par value, i.e £1,000 loan part sells for £1,000.

However, selling at a variable rate changes the value of the auction, and allows the seller to account for accrued interest, especially in relation to Roll Up loans. It is up to the seller to decide on this premium and the buyer to decide if it is valued correctly. 
 

Can I sell my loan part in a TLC on the Secondary Market?

ThinCats Lending Clubs (TLCs) are a portfolio of loans and therefore, a single status cannot be applied to them. TLCs are able to be traded on the Secondary Market until twelve months before the end of the loan period.

The trading policy for TLCs allows for them to be traded on the Secondary Market even if the portfolio contains impaired loans. Information about the status of each loan and the breakdown of the mix of loans within any TLC can be found in the VIP Dropbox. If you are unsure how to access these documents please contact us via admin@thincats.com and we will be happy to help.

Detailed analysis of TLCs is published monthly and is made available to lenders with funds on the platform. All lenders are advised to complete their own due diligence prior to bidding on the secondary market so that they understand what they are purchasing.

How long will my loan part be listed for?

Auctions will begin the following day and be listed for 7 days. Lenders are able to request shorter auctions by contacting admin@thincats.com

Am I able to cancel one of my auctions, or reject the buyer’s offer?

Yes, but you must contact admin@thincats.com before the end of the auction

I accidentally placed a bid on a loan, am I able to cancel it?

Unfortunately, we do not have the facility to cancel your bid, however, in some circumstances, we will allow you to resell the loan part with no fees.

I am trying to bid but I am getting the error message ‘Integer does not match increment’, what does this mean?

Bids must be in multiples of £1,000. If the loan part is not a multiple of £1,000, you must place a bid for the nearest thousand, or the whole loan part amount.

I am trying to bid but I am getting the error message ‘Bid rate exceeds maximum allowed’, what does this mean?

This means your ‘Bid Rate’ exceeds the maximum rate. In order to view the maximum bid allowed, click on the ‘Loan Part Details’ tab, then the ‘Loan Part Auctions’ tab.

I am trying to bid but I am getting the error message ‘Bid rate is not a multiple of bid decrement’, what does this mean?

This mean the bid rate you are entering is not in a multiple of 0.1. All bids placed must be a multiple of 0.1. 


Secured lending

What security do you take out on loans?

We take out a variety of security depending on the loan itself, the most common form being a first ranking debenture. See our securities page for more details.


Syndicated lending

What is a loan syndicate?

The syndicate is the group of Lenders that together provide individual loans to a borrower under the loan agreement.


Tax

Does ThinCats calculate and deduct income tax on behalf of lenders?

No, we do not. It is each member’s own responsibility to declare any money earned through ThinCats to HMRC. 

Does ThinCats issue tax statements?

Yes, we issue tax statements containing gross interest earned, principal write off, and unrecoverable principal from your portfolio during the specified tax year. 

Who do you issue tax statements to?

We automatically issue tax statements to UK personal tax payers. All others, such as SIPPs or limited companies, need to request a tax statement. Please contact us on tax@thincats.com and we will be happy to help. 

When do you issue the tax statement?

We issue tax statements as soon as possible following the end of the tax year and no later than 30th June. 

Does your tax statement contain calculations of provisions or irrecoverable principal?

Due to the tax rules for 2016/17 you personally are able to submit for tax relief in relation to P2P loans which may become irrecoverable. For this reason, we are required to provide you with provisions in relation to specific loans that you are invested in, which may be of assistance if you choose to claim tax relief for the specific loans. The decision to claim tax relief or not however is solely yours to make. 

For which loans do you provide calculations of unrecoverable principal?

We only provide this information about loans where we are certain of loss and only provide the principal that we are certain is irrecoverable. It is up to the lender, based on the loan updates they receive throughout the year, to decide what they submit to HMRC.


Terminating an account

Can I terminate my membership?

You may terminate your membership at any time as long as you do not have any outstanding loan parts. 

How do I terminate my membership?

Please send us written notice to admin@thincats.com. If we receive such notice we may seek additional information to confirm that the origin of the request is genuine. Once we are satisfied of the authenticity of the request, we will arrange the transfer of any outstanding balance to your nominated bank account. 


ThinCats insolvency

What would happen if the ThinCats platform were to fail?

If the Platform were to fail or ThinCats were to become insolvent, lose its FCA authorisation or otherwise cease to operate, we have made arrangements with a view to ensuring that your loans will be unaffected by managing the orderly run-down of the platform. Collections and distributions of all payments from borrowers would continue in accordance with the terms of the loan documents. The responsibility for representing the syndicate will remain with the facility agent or its nominee and we have entered into arrangements to transfer the servicing functions to a third-party back-up servicer, Baker Tilly Creditor Services LLP with whom we have entered into a back-up servicing arrangement. We reserve the right to use a back-up servicer prior to insolvency where such action is in the best interests of all of the investors.


Transferring an account

Can I transfer my account to another person?

You may not assign or transfer your account to a third person without our prior written consent (which we may grant or withhold in our sole discretion).


Website security

What encryption is used on the ThinCats website?

Connections made to the ThinCats website are encrypted with a 256-bit encryption. 


Withdrawing funds

How do I withdraw money from my account?

Lenders who wish to transfer uncommitted funds can send us a withdrawal request through the ThinCats system. Once we have received your request our admin team will process the withdrawal and the funds should be with you within 3 working days. Except under special circumstances, and by prior arrangement, we can only return your funds to the bank account they came from. 

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