Lender ThinCats targets Scots SMEs with £1bn pot

A UK peer-to-peer lender focused on small and medium-sized enterprises (SMEs) is closing in on a near-£1 billion pool of capital to deploy with growth plans in place for Scotland.

Peer-to-peer lender ThinCats is targeting small and medium-sized enterprises in Scotland.

ThinCats was established in 2011 and specialises in loans ranging from £500,000 to £10 million. It has lent £350m to date across the UK, including £20m-plus north of the border.

Chief executive John Mould told Scotland on Sunday: “We plan to do £50m to £75m [of lending] next year in Scotland.”

The lender has both retail and institutional investors, plus 70 staff, up from eight in 2015.

Mould said the firm currently has more than £600m to deploy. “By Christmas, I’ll probably have another £250m.”

Last month ThinCats unveiled a £300m agreement with global asset manager Insight Investment to fund UK SMEs with loans.

The lender, whose parent company is ESF Capital, uses both development managers on the ground – including a recent addition in Glasgow – as well as a data model built using 25 years’ worth of SME information. It believes there are just over 4,000 relevant SMEs in Scotland that have an increased need for funding over the next year and meet its credit criteria.

The firm’s activity in Scotland includes providing £1m to Network ROI, a Midlothian-based IT firm, helping it complete an employee buyout.

Mould sees great potential to fund similar transactions. “We’ve actually got quite a large pipeline in Scotland now of about £40m [and 30 deals], and an area we particularly focus on is employee ownership businesses.”