ThinCats is now seeing businesses seeking coronavirus business interruption loans for growth funding rather than survival.
In April, the alternative lender, which focuses on small- and medium-sized enterprises (SMEs), gained accreditation to deliver the coronavirus business interruption loan scheme (CBILS) and began facilitating the loans for existing borrowers.
This month it opened up applications to new customers as well.
ThinCats said its typical CBILS borrowers had required the funding for survival. This included businesses that were forced to close due to the lockdown restrictions and companies that had suffered from cashflow issues due to the pandemic.
However, the alternative lender is now seeing a rise in the number of firms seeking the government-backed scheme for growth.
“This includes funding for acquisitions where businesses can take advantage of the government’s payment of the first 12 months interest to enable the target acquisition to bed down without incurring any debt servicing costs,” ThinCats said in a blog on its website.
“The main exclusion for acquisitions within CBILS is funding for management buy-outs and and management buy-ins. Other than these, we can fund pretty much everything else that we normally would, and the government will also cover the lender’s fee and legal costs for all CBILS loans.”
ThinCats said firms are more likely to want funding for growth if there is a high proportion of workers that can return from furlough to full-time employment, and if the nation can avoid a second wave of the coronavirus in the winter.
However, if it’s a low proportion and the nation suffers from another wave of coronavirus, leading to a second lockdown, funding requirements would be for survival once again, ThinCats added.
Read more: The P2P CBILS rates on offer to borrowers
ThinCats has also called for the “successful” CBILS to be extended beyond its current deadline in September.
“So far during the Covid-19 pandemic the government-backed loan schemes such as CBILS have been successful in stimulating lending to businesses and we would echo those that are encouraging the government to make an early announcement on extending CBILS beyond the current September deadline,” the platform said.
Last month, ThinCats became the first non-bank lender to receive accreditation to deliver the coronavirus large business interruption loan scheme – a larger version of CBILS.