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
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.
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.
Details of our default rates can be found on our statistics page.
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.
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
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.
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.
Cash will be passed back to lenders as it is received from borrowers, less the ThinCats DLP administration fee of 1% pa.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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).
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.
There are currently no plans to do this.
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.
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.
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
No, we only issue updates when there is news that affects your investment. We do not provide updates on business performance or progress.
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.
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 email@example.com.
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.
Yes, each investment opportunity features a Q&A facility, which allows investors to ask specific questions or request further information.
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.
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.
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.
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.
The syndicate is the group of Lenders that together provide individual loans to a borrower under the loan agreement.
No, we do not. It is each member’s own responsibility to declare any money earned through ThinCats to HMRC.
Yes, we issue tax statements containing gross interest earned, principal write off, and unrecoverable principal from your portfolio during the specified tax year.
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 firstname.lastname@example.org and we will be happy to help.
We issue tax statements as soon as possible following the end of the tax year and no later than 30th June.
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.
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
You may terminate your membership at any time as long as you do not have any outstanding loan parts.
Please send us written notice to email@example.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.
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
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).
Connections made to the ThinCats website are encrypted with a 256-bit encryption.
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.