Insider Media Limited

Sterling Capital Reserve will be the first East Midlands firm to sponsor investment website ThinCats.com, Insider can reveal. The Nottingham-based commercial finance broker will bring the funding scheme - which invests up to £1m into growing businesses - to the East Midlands.

As previously reported by Insider, ThinCats.com is the first online marketplace featuring experienced investors making secured loans of between £50,000 and £1m to UK companies.

It uses an online auction to place an investor with a company in need of funding.

Sterling Capital Reserve has become the first East Midlands sponsor of the scheme, which was pioneered across the Midlands before rolling out nationally earlier this year.

David Griffiths, managing director of Sterling Capital, said: "This is a totally transparent process where users control the interest rate. Thincats.com lists thoroughly vetted UK businesses seeking loans, displaying the amount and rate desired. Lenders then bid to join a loan syndicate for a business in an auction process similar to eBay, setting the amount and rate at which they are willing to lend."

The lending syndicate is made up from the bidders offering the lowest interest rates. The business is then offered a loan at the weighted average interest rate and will accept the loan if the deal is competitive.

The minimum bid is £1,000 but the most common loan per person per company is £5,000.

As a sponsor, Sterling Capital Reserve will help lenders by producing an information pack comprising details of companies seeeking investment, the management team, what the loan will be used for, the market in which the company operates, its trading performance, profit forecast, ability to repay and details of the security offered.

The news comes a year after Sterling set up mezzanine finance company Strata Finance, an agency for borrowers and lenders within the commercial property market.

Griffiths said: "As a sponsor, we visit the company a good number of times to meet the management team and really get under the skin of their business. It’s a much more personalised service and harks back to what bank managers used to do years ago."