East Mids businesses to cash in on ThinCats investment
Three East Midlands companies have secured investment from a fledgling online marketplace which launched a pilot project across the region. Having invested £1m in eight projects, the managing director of ThinCats.com, told Insider the company planned to inject £100m over the next three years.
Kevin Caley's comments came as the organisation prepared to launch the services nationwide this morning (20 June).
The website, which began trialling in January this year in the Midlands, has so far lent more than £1m through eight loans.
Among the companies to receive investment were Ilkeston-based Armstrong Brands, a retailer of clothing and accessories. The company needed £100,000 to purchase raw materials to sell through its retail outlets.
ThinCats lenders provided £105,000 over a year-long period.
John Carr Motorcycles, based in Alfreton, secured £75,000 over three years to replenish its bike supply.
Building Services Design, based in Corby, also won investment of £150,000 over 12 months to provide additional working capital.
Caley told Insider: "The investment service cuts out the cost of loaning from a bank, and the savings are shared between the borrower and investor. There are a couple of organisations which offer a similar peer-to-peer lending system, but don't offer the large amounts we do. Our main competition is the banks."
The investment service is being launched nationwide today (20 June) and will offer funding of between £50,000 and £1m.
Caley said that the high level of interest from businesses needing a cash injection was so far slowed by a lack of willing investors.
"The biggest frustration is that there are lots of businesses which need funding, but not enough lenders as yet – but we're hoping to attract more as we launch the website nationally.
"We began by trying to attract angel investors, and they've been interested in the low risk factor – it's not volatile like the stock market."
Caley said that following on from ThinCats' six-month trial in the Midlands, in which £1m has been invested, the organisation now aims to invest a further £5m nationwide by the end of the year.
"We're aiming for another £5m this year, £30m the year after that, and want to invest £100m in businesses over the next three years," said Caley.
Caley, who has 27 years' experience in venture capital and small business finance, said he felt the venture was launching at a good time.
"Banks are so reluctant to lend, but businesses still need support and finance – this is the perfect opportunity to offer an alternative and get our brand and reputation established.
"In the long term, the banks will come back which will drive our investment rates down, but even then they won't be able to compete with our rates, as their overheads are so much higher than ours."
