Fast, Flexible and Consistent – the keys to successful funding
By Amany Attia, CEO ThinCats
I am pleased to say that at ThinCats we did more than just keep going; we have been able to expand and do more than ever to provide vital funding to the UK’s mid-sized SMEs.
Experian’s M&A report for the first half of 2021 showed ThinCats was the 5th biggest lender for M&A in the UK by number of deals, up from 11th place in the rankings last year. In fact, we funded more M&A loans than three of the UK’s “big 5” high street banks.
Our flexibility, speed, and understanding of credit in the mid-sized sector have been critical to this success, but what has been even more important is our consistency.
If you asked me who our competitors were two years ago, I would have mentioned some of those High Street banks and one or two challenger banks. Today I would not name any High Street banks among our main competitors, and while I might still name a challenger bank as a competitor, it would not be the same one as last year.
But it is not us that has changed, it is the rest of the market. Our appetite and focus on supporting mid-sized businesses have remained consistent and unwavering.
This area of the market has long been underserved by finance. There are plenty of lenders to smaller businesses, but their model is typically based on centralised and automated credit underwriting. That makes sense - you cannot individually underwrite a £100,000 loan. But this fully automated approach is not suited to mid-sized businesses that need a closer relationship with their lender, as well as flexibility in the product and service they receive.
Meanwhile, above the £15-£20 million lending level there are also plenty of providers because the size of loans involved means an investment in service and flexibility makes economic sense for their own lending business.
The result is that established medium sized businesses demonstrating strong growth prospects have been neglected by other lenders. We estimate there are around 400,000 businesses in the UK that we define as mid-sized SMEs.
ThinCats success is due to our clear focus on this area of the market and our lending model that has been designed specifically to address its needs.
Firstly, we have taken a regional approach, with business development teams and credit experts on the ground across the UK, who build direct relationships with their local business finance communities.
Secondly, we have combined the best features of automation with a direct relationship approach. PRISM (Propensity and Risk Model) is our proprietary credit model and our first point of review. PRISM accesses credit data and other publicly filed information on any company and allows us to triage enquiries and give an indicative price extremely rapidly. We do not rely on it for making our lending decisions, but it does provide a rapid filter for both us and the potential borrower from which to decide whether to go forward.
This quick initial sifting means that once we are through that filter, we can then really get to know the client and their business and deliver that flexible service and product that our borrowers and their advisers need.
We have brought together the automated process of the smaller loan end of the market with the direct and bespoke relationship usually only available for loans to much larger corporates. In a sense it is a remarkably simple solution, but it has taken time, commitment, and expertise to develop.
There are many factors behind ThinCats success, but behind them all lies this simple focus and dedication to our market.
We look forward to continuing to service this vital part of the economy, refining our existing service, and innovating with new products.
It has undoubtedly been a challenging 18 months, however, by focusing on the needs of our clients for consistency, speed and flexibility we have provided valuable support for many businesses to navigate the current environment and accelerate their growth to the benefit of their stakeholders and the wider economy.
