The Manufacturer and ThinCats have joined forces to make £100m of funding available to dynamic manufacturing SMEs.
ThinCats, the alternative finance specialist, has announced plans to use its network of commercial finance experts to support manufacturers across the UK, including those looking to respond to the opportunities presented by Industry 4.0 – or the Fourth Industrial Revolution.
Steven Barr, the managing director at Hennik Edge, The Manufacturer’s expert advisory service, said: “We’ve heard from frustrated manufacturers who need a different kind of finance from what’s on offer in the high street.
“The Manufacturer’s new £100m of funding, backed by ThinCats, offers a great alternative for ambitious, growing SMEs.”
To contact the ThinCats team and to apply for the new £100m fund from The Manufacturer and ThinCats please visit: https://www.thincats.com/manufacturing
This article first appeared in the February issue of The Manufacturer magazine. To subscribe, please click here.
Why not just go to the bank?
The banks have become increasingly restricted since the financial crisis, and regulation has put them under immense pressure to maintain higher capital ratios and to de-risk their balance sheets.
As a result, more and more SMEs are falling short of the banks’ lending criteria. Regrettably, many are falling through the funding gap – businesses referred to in the media as the ‘deserving underserved’.
Thankfully, this gap is starting to be filled by alternative lenders, who match investors directly with borrowers. Within this sphere, companies offering smaller, unsecured loans have so far stolen the peer-to-peer lending limelight.
ThinCats is different. It is leading the next step in the alternative funding evolution; providing access to secured finance for ambitious SMEs looking for funding of up to £5m.
It does this by attracting a mix of substantial institutional and retail investor funds looking to benefit from the lower correlation of corporate loans compared to more traditional stock-market-listed investments.
The overall process is facilitated and implemented by an experienced ThinCats team who are equally adept with the ‘fin’ as well as the ‘tech’.
ThinCats’ strengths lie in skilfully matching the risk that investors want to take with the funding needs of each SME, providing a bespoke service for businesses and their advisers, with a crucial personal touch.
Where have all the bankers gone?
Not only are the banks restricted as to where they can lend, their ability to service their business clients has also diminished as banks continue to close branches in vast numbers across the UK.
SMEs have lost access to the traditional bank manager, and with this, their knowledge, experience and ability to see beyond the raw data.
The good news is that many of these bankers have moved into the alternative finance sector; working for providers such as ThinCats, or as specialist commercial finance advisers.
For ThinCats’ clients, the result is a funder who can give a personal and professional service with great local and industry knowledge, without the overhead costs and bureaucracy of the big banks.
Likewise, accountants and commercial finance brokers have recruited many an ex-bank manager, harnessing a huge wealth of finance and business experience outside the banking network, which SMEs can now tap into.
This different way of working means that the provision of finance can be flexible to meet the specific needs of a business; for example secured loans don’t have to mean physical assets, cashflow is also valuable.
It marks the return to having a proper, personal relationship with local business experts, who are genuinely interested in their clients’ business growth – a role that the banks used to play that’s now being replaced by a genuine alternative.
Track record of successfully funding manufacturers
The partnership with the specialist manufacturing consultant Hennik Edge and The Manufacturer, means ThinCats gains a deeper insight into the needs of manufacturers, enabling them to build on their already significant experience of lending to this sector.
John Mould, CEO at ThinCats highlights: “This partnership is great news for fast-growing manufacturing firms. In recent times we have lent £20m to businesses operating in the manufacturing space, with 73 loans servicing 50 different companies.”
One manufacturer that has seen significant benefit from working with ThinCats is Gainsborough Silk, the historic Sudbury textile weaver, which produces fabrics for Royal palaces, state buildings and grand residences across the world.
ThinCats provided a working capital loan of £500,000 to the firm after it had been starved of investment over a 20-year period. The loan helped Gainsborough Silk ramp up production capacity with the purchase of additional looms and contributed to the modernisation of its dye house.
John Mould added: “Gainsborough was not the simplest credit story, but we liked their market position and management.
£We were pleased to have been able to structure a deal that raises the investment capital the business requires and offers attractive returns to ThinCats investors.”
Working capital, acquisitions, asset purchase or refinancing
Other such businesses that have already benefited from ThinCats funding include:
- A manufacturer of aluminium parts for the car industry, that needed to be able to provide bespoke tooling for clients up front; a working capital loan of £480k helped them to fulfil increasingly large contracts.
- A flat-roofing company in need of funding for the purchase of a second production plant to ramp up their capacity arranged a £950k loan, which enabled them to take all of their manufacturing in-house, giving huge improvements in turn-around times.
- A metal treatment business producing alloy coatings desired funding to purchase machinery and complete factory alterations; the ThinCats loan brought about efficiency savings and a significant increase in output.
John Mould concludes: “ThinCats specialises in providing funding that, in many cases, the high street banks cannot.
“Whether it’s for working capital, acquisitions, asset purchase or refinancing, from £100k to £5m and throughout the whole of the UK, we will help to ensure that manufacturing continues to be the lifeblood of the UK economy by supporting growth across the sector, into Industry 4.0 and beyond.”
ThinCats is a trading name of Business Loan Network Limited (BLN) registered in England & Wales No. 07248014, authorised and regulated by the Financial Conduct Authority. BLN is not covered by the Financial Services Compensation Scheme. Capital is at risk.