Peer-to-peer may still be seen by some as a new funding source, about which they are perhaps under-informed, but there are many out there in the South West who are in the know.
These companies are benefitting from access to a funding stream that not only plugs many of the gaps left by diminished bank lending, but can also provide borrowers with a genuinely astute funding option; based on turnaround times, repeat borrowing frequency, and the use of innovative data analysis, alongside human interaction, to assess loan suitability.
The South West region has provided a steady uptake of loans, with businesses across the region accessing peer-to-peer funding for a wide variety of reasons.
The ThinCats business lending platform has processed loans for companies across the South West, including a manufacturing facility in the Tewkesbury area, which used a P2P loan for working capital to allow expansion into new markets; a mobile network operator in the M5 corridor, which accessed a loan for equipment purchase to develop new contracts; a restaurant chain, which drew down the loan in order to open new branches in and around Bristol; and an agricultural research facility in Gloucestershire, which secured funding for supporting stock holding and growth.
A Cheltenham based construction and development company were the first property development loan listed on the ThinCats platform in 2013, and since then the company has had 6 more loans, funding a variety of property based projects, from convenience store developments to a local estate of 10 houses, all within the Gloucestershire area.
The region blossoms despite the tightening purse strings of the standard lenders; one Somerset based borrower, who was initially sceptical of the alternative finance industry, was forced to investigate other revenue streams after the bank’s appetite to lend decreased.
£10 million of P2P loans
Since 2015 the borrower has amassed a total of £10 million of P2P loans, which have been used to fund an incredibly successful array of business procurement, expansion and property development across the region.
These investments have not only secured the longevity of existing local businesses, but have created new companies, taken on a significant number of employees, trained apprentices, and boosted the business potential of the supplier network across the board.
Indeed one such business, an estate in rural Somerset, increased staffing levels from 5 to over 160, upped the contractors on their books from 5 to 38, took on an extra 11 apprentices and boosted their annual local expenditure from around £300,000 to £1.5million.
Range of loans
John Sharpe, ThinCats Business Development Manager for the South West, has been out and about in the region, talking to SMEs, intermediaries and brokers, and has gained a real flavour of the needs and wants of those looking for funding.
Currently, he is talking to intermediaries in the area about loans ranging from £150k to £1.5million, for projects as diverse as rebranding, renovation, business acquisition and company expansion, and industries covering retail, manufacturing, engineering, maintenance and community development.
John says, “An overriding factor for many is that the drawdown times are generally days rather than months, and there isn’t the need to wait the 12 months between loans that many banks would demand.
“This means that businesses have been able to exploit opportunities quickly and effectively, and companies have come back to the platform, repeatedly in some cases, to take advantage of business opportunities as they arise, avoiding long decision making processes that can be prohibitive to growth.”