A prominent peer-to-peer lender is actively seeking to expand its broker numbers through direct trade investment in the group and a potential initial public offer (IPO).
ThinCats Australia is in discussions with a range of credit unions, private equity funds and accounting firms who wish to enter the growing sector through a strategic alliance with the company.
As an online lending platform, ThinCats connects wholesale investors with SME borrowers across Australia – a customer segment that the P2P lender said is not optimally serviced by banks and non-banks.
The company currently works with 203 lenders and over 80 finance brokers, as well as a number of mid-tier accounting firms.
“We are in deep discussions with a number of parties about our platform, which specifically targets the more than two million SME businesses whose incremental financial needs are often ignored by the big lenders,” ThinCats Australia chief executive Sunil Aranha said.
“We are also generating a lot of interest from finance brokers, who will be rewarded as they bring loans to the platform, and we are actively considering an expanded loan offering as well as higher interest rates to price for any perceived additional risk,” he added.
While acknowledging broker commissions of 25 basis points for leads and 15 basis points off the value of self-sales are “very little”, Mr Aranha pointed to the fact that this is essentially an untapped additional revenue stream for the majority of brokers, who he said have “been a very important channel to generate leads”.
“It's not a competitive position between banks. This is really money that borrowers need that they can't get from anywhere else,” he explained.
“We want to increase the number of loans we're getting referred across the board. The source [previously] for us is either people come directly onto our website and ask us for money, or they come to an accounting firm. We are increasing our reach and relationships with small and middle-sized accounting firms as well. We want to reach out to all the commercial style brokers.”
[Related: Eighty brokers partner with P2P lender]
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