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Peer2Peer Finance News | January 17, 2019

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ThinCats pushes back IFISA launch and introduces first investor fee

ThinCats pushes back IFISA launch and introduces first investor fee
Suzie Neuwirth

THINCATS has pushed back the launch of its Innovative Finance ISA (IFISA) and is introducing an investor fee for the first time.

The peer-to-peer business lender previously told Peer2Peer Finance News that it planned to launch its IFISA by the end of 2017, with head of retail Stewart Cazier saying that he would be “very disappointed if it didn’t happen this year”.

But the Midlands-based firm said on Friday that building new systems to accept and administer ISA investments had taken longer than expected, so it will not launch the tax wrapper until the new year.

It said it will confirm a launch date once it is confident that the new systems enhancements are ready to deploy.

The company confirmed its plans for a staggered roll-out of the ISA, with priority given to lenders who had already registered an interest in the product, in the order that they registered.

It will only offer the ISA to new clients after existing customers have had the opportunity to open an ISA account, which it expects to be in the next tax year.

ThinCats also announced that it is introducing a lender fee for new investors, equivalent to a one per cent reduction in annual returns, effective from 1 January 2018.

It attributed the new fee to its “considerable investment in the business” which it said “could not be sustained by the original revenue model”.

“ThinCats has been operating for over six years with no investor fees,” it said.

“However, over the last eighteen months, there has been considerable investment in the business across a range of different areas – for example in a long-term programme of systems enhancements and building a large and experienced loan origination team – to improve the quantity, quality and range of loans available to you.

“These investments are starting to come to fruition – we recently achieved full authorisation from the Financial Conduct Authority and are now focused on improving loan origination as our ongoing priority.

“This programme of investment could not be sustained by the original revenue model, so there was a need to bring ThinCats closer to common practice in alternative finance and introduce a lender fee.

“However, we believe it is only fair to recognise the support of our existing investors, many of whom have been with us for many years, by exempting them from the new fee.”

In October, ThinCats, alongside its parent company ESF Capital, announced the completion of a £200m institutional funding programme, which will enable it to scale up its lending.