Ignite combining AI and relationships to target £12bn SME lending opportunity

In an exclusive interview with B&C, Ignite Funding Partners’ founder Ravi Anand (pictured above) revealed how he will use old experience and new AI tools to grow his latest venture.

It’s been around 12 months since ThinCats managing director Ravi Anand left the alternative small business lender following its takeover by Shawbrook Bank.

He helped grow ThinCats to a respected lender in the SME sector with a loan book worth £2.5bn.

Now he is back with his own enterprise Ignite Funding Partners (Ignite), which aims to support the larger end of the SME market.

A familiar approach, a new venture

He said he is taking the lessons he learnt from his 10 years at ThinCats into the new venture.

"As a non-bank lender, the approach to the market is quite different when it comes to relationships, transparency and flexibility. These are the things ThinCats competed and won on,” Ravi told B&C.

“We will do the same at Ignite.

“Embedded in that is that credit is front of market, it is not a last-minute process decided on from some ivory tower.

“We are coming with the same mindset and attitude to risk.

“I have met around 60 advisers in the past few weeks across the market and they have consistently said that this was a USP that has been lost in the market.”

Building a team from familiar faces

Ravi said he has recruited several former ThinCats employees for his new venture across business development, credit, marketing and relationship management.

Five of these new hires will be in the business development department, based in London, Manchester and the Midlands.

The new lender recently announced the appointment of Mike Haskett as chief commercial partner.

Cutting due diligence costs and time

Ignite has a new tool at its disposal to emulate what Ravi previously helped grow in his old role, AI.

“We are trying to create tools that automates a lot of the financial due diligence on borrowers by pulling data from a company’s accounting system,” he said.

“We pull the data, create the accounts and do some automated analysis.

“We are using AI to undertake the work of an analyst or a third party.

“This reduces the time spent [on applications] by more than half and more importantly it gives a more informed view of the borrower to provide a more structured and thought-through debt package.

“So we are not just saving time and money but are providing a better result.”

Ravi acknowledged it may not completely remove the need for a borrower to pay for some form of third party due diligence but it could save some of the cost, which can be between £50,000 and £100,000.

This is the journey that Ravi said he was planning on for ThinCats before the Shawbrook takeover but he admitted it was easier to do from scratch.

He also noted that AI tools have exploded over the past few years and that he has had the benefit of time off to focus on developing his plans.

AI-driven processes, relationship-led lending

The human touch will remain important though and Ravi said business development managers will still meet with senior teams and have informed conversations.

“Because we know what a process looks like and the data we are after, putting AI agents on top is relatively easy,” Ravi said.

“It allows us to use our credit brains more intelligently. It is still the human brains that make the decisions and have the interactions with management that decide whether we lend or not. We are just trying to be more systematic with the basics.”

Sectors and opportunities in focus

It is with this in mind that Ignite will offer tailored lending facilities of between £1m and £25m to support growth, acquisition, ownership transition and refinancing strategies.

The lender already has £500m of capital being lined up from institutional investors and Ravi suggests there is a total addressable market of around £12bn a year.

This is based on analysis of the assets of 400,000 mid-market SMEs.

Ignite will work with corporate advisers and accountancy firms to support services businesses with decent predictable recurring revenues and also care homes.

The core product will be term loans of four to five years, often with a credit facility alongside it.

Growth plans take shape

There are no public lending targets, but Ravi says he expected it to take around two years to deploy the £500m funding and talks are already underway with potential borrowers.

He added: “We are seeing deals from £1m to £20m, the average is around £9m to £10m.”

There will be business development teams across the country and offices in London and Manchester, with Ravi expecting a big focus on the North, the South East and also the capital.

Headcount is also expected to reach around 15 by March 2027, depending on the market, although Ravi acknowledged that with AI, around 20% fewer staff are needed.

He said technology will be used to allow staff to focus on value-add initiatives rather than the basics.

He adds: “Every aspect of our business will touch AI.

“Even our management accounts and board packs will be done with AI.

“Our processes will be AI driven but everything else will be relationship-led.”