Peer-to-peer (P2P) lender ThinCats Australia has received a significant funding commitment as it continues to grow its presence in the business lending sector.
The platform’s UK partner, ESF Capital, has agreed to provide it with $30 million in funding for small business loans over the next two years.
In just its second year of trading, ThinCats CEO Sunil Aranha said the company is targeting $20 million in loans to businesses, with a projected $100 million to be lent next year.
“We are now seeking business people who are not interested in putting their homes on the line to fund their enterprises, as most often required by the major banks,” he said.
Mr Aranha said there is a real opportunity for P2P lending in Australia due to APRA’s pressure on the major lenders and their traditional aversion to unsecured loans, “as well as [their] inability to price small business risk accurately”.
“Many banks in Australia really operate more like building societies, as they are demanding property as security, instead of backing their judgement in supporting their small business customers on the basis of their current and future trading performance,” he said.
ThinCats has funded 24 loans worth more than $3.1 million to date, at interest rates ranging from 11.5 per cent to 15 per cent.
[Related: UK fund to back ThinCats Australia]