ThinCats highlights opportunities for alternative lenders
Former peer-to-peer lending platform ThinCats has extolled the potential benefits for alternative lenders as banks start to become more cautious in their lending.
According to a blog on the business lender’s website, advisers have been telling ThinCats that banks are pulling back on their lending activity, which creates an opportunity for alternative lenders such as P2P lending platforms.
“If banks start to become more cautious, then advisers and alternative lenders like ThinCats may benefit as borrowers look beyond their traditional lenders,” said ThinCats.
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ThinCats’ advisers have reported that deal flow is “generally strong” through to the end of 2022 and into early 2023. Rising interest rates have not yet led to a reduction in appetite for transactions, the advisers added. However, some borrowers have reduced their leverage multiples and there are signs that high street lenders have become more selective.
Advisers in the North West are currently most positive about their deal pipelines, with some reporting an increase in demand for debt advice from finance directors who have historically dealt exclusively with their incumbent bank. This suggests that directors are starting to look further afield for their funding needs, ThinCats said.
“A common view shared by advisers across the UK was that that deals are taking much longer to complete than 12 months ago as deeper due diligence is required by investors and lenders,” added ThinCats.
“This is especially so for businesses in sectors exposed to discretionary consumer spend, interest rate movements, currency exposure or with high energy costs as a proportion of their overall input costs.”
A number of alternative lenders have tightened their credit processes recently in anticipation of increased demand from new borrowers.
Read more: P2P well placed for a recession