ThinCats increases flexibility for RLS loans above £5m



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ThinCats has introduced new features for cashflow loans above £5m under the Recovery Loan Scheme (RLS), following its accreditation by the British Business Bank in July.

Although the maximum loan size per business entity permitted under RLS rules stands at £10m, ThinCats announced it will support different business entities within the same group up to a combined total of £15m.

In addition, the lender will now consider a capital repayment holiday of up to 12 months on all loans, with the potential for 100% bullet payments depending on leverage multiples.

The finance provider has also reduced borrower rates and may, depending on the business and sector dynamics, lower them further when leverage multiples fall below certain levels — for instance, if a loan has an initial leverage multiple of 2.5x earnings before interest, taxes, depreciation, and amortization (EBITDA), the ongoing interest rate may reduce by 25 basis points if the leverage multiple falls below pre-agreed thresholds.

Mike Hackett, head of business development at ThinCats, said: “As part of our commitment to fund mid-sized SMEs, we hope the additional flexibility will provide further support in helping entrepreneurs maximise their opportunities to expand organically or through acquisition. 

“The RLS is an excellent vehicle for delivering funding to UK businesses as they seek to expand post-pandemic restrictions. 

“Although the scheme does not offer the same 12 months interest-free period as its CBILS predecessor, it can be used for a wider range of funding needs and at a lower interest rate than funding outside RLS. 

“As the maximum loan size is double the amount allowed under CBILS, RLS is particularly attractive to businesses seeking to expand through acquisition or seeking to build their working capital to fund growth. 

“We are seeing strong interest from both corporates and private equity-backed businesses. 

“I would urge advisers or prospective borrowers considering new funding to act quickly given that the RLS scheme only runs for a further four months.”

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