ThinCats, a leading alternative lender, will use a guarantee provided by the British Business Bank’s ENABLE Guarantee programme to deploy significant new funding capital. Citi, a multinational investment bank and financial services corporation, will provide ThinCats with a senior warehouse facility. This, allied to the guarantee provided under ENABLE, will support ThinCats in its efforts to lend up to £300 million of funding capital, enabling it to fund more mid-sized SMEs.
This is the first transaction under the ENABLE Guarantee programme to facilitate lending for term loans to smaller businesses from an alternative lender with a bank as a senior funder.
The new funding line will be used by ThinCats to support lending outside the Recovery Loan Scheme, for which it was recently accredited by the British Business Bank. In total, ThinCats now has more than £500 million of lending capital to deploy over the next year or so.
The ENABLE Guarantee programme is designed to encourage banks and other lenders to increase their lending to smaller businesses by reducing the amount of capital or junior funding required for such lending. Under an ENABLE Guarantee, the UK Government takes on a portion of the risk on a portfolio of loans to smaller businesses, in return for a fee. When working with non-bank financial institutions, this typically aligns with any senior funder.
Ravi Anand, Managing Director, ThinCats: “We are currently seeing high levels of demand from mid-sized SMEs to fund organic growth opportunities and for larger merger and acquisition transactions. The provision of this new funding is well timed to support businesses with their post-pandemic growth plans.
SMEs are a critical sector of the economy and rightly deserve support via the British Business Bank ENABLE programme. ENABLE does what it says on the tin; in this case enabling alternative lenders like ThinCats, working alongside banks, to provide bespoke lending at scale to support UK businesses.”
Reinald de Monchy, Managing Director, Guarantee and Wholesale Solutions, British Business Bank “The ENABLE Guarantee programme was set up to increase funding to smaller businesses by making it more attractive for banks and other financial institutions to lend to this part of the market. We are delighted to be involved in this innovative partnership with ThinCats to the benefit of smaller businesses across the UK.”