Recruitment firm secures loan after eight banks decline
A STAFFORDSHIRE-based recruitment business rejected for funding by eight banks is now targeting expansion after securing a loan of £150,000.
Red Advertising runs a suite of 47 internet job boards including medicaljobs.co.uk and bankingjobs.co.uk. It has been backed by peer-to-peer lender ThinCats.com after being rejected by eight banks under the Enterprise Finance Guarantee Scheme.
The firm was founded in 2004 and currently employs eight people at its offices in Cannock. The finance from ThinCats.com, secured over a five-year period, will be used to roll out additional product lines and hire a further 12 members of staff to support expansion plans.
Launched in January 2011, ThinCats.com is the UK’s first online marketplace allowing investors to make secured loans directly to UK businesses. So far, ThinCats has facilitated 13 loans totalling £1.67m.
In addition to Red Advertising, ThinCats has also help fund another Cannock business, TGI Corporation, an importer of hooded tops primarily for the university market. TGI has borrowed £250,000 to take on more stock and broaden its product range.
Richard Clarke, managing director, Red Advertising, said: “Our business is proven and profitable yet I’ve lost track of the number of days and weeks I’ve spent jumping through hoops in order to try and secure some support from the banks. As each loan application was rejected, I became more and more disillusioned.
“I thought that the Enterprise Guarantee Scheme was designed precisely for businesses like ours but in reality the banks didn’t want to know.
“ThinCats provided us with an invaluable service. Without their support, we would not have been able to raise the finance we needed to advance our business.”
Once listed on the ThinCats platform bids quickly rolled in and when the auction closed there were over £288,000 of bids for a loan of £150,000. The most competitive bids made up the final loan syndicate at a rate of 12.47%.
“While this was slightly higher than a high street bank might have offered us, we were happy to accept it as the entire process had been smooth, transparent and hassle free,” added Mr Clarke.
Kevin Caley, managing director, ThinCats.com said: “Our approach harks back to a time when businesses would have enjoyed a personal relationship with a traditional bank manager who had the ability to make lending decisions. Unfortunately, those days have gone and, as a result, many quality businesses loan requests are being turned down.
“By getting under the skin of each business and building a rapport with their management team, we are able to make a much more informed decision about a company’s ability to repay than if we relied purely on computer systems and credit scores. This means businesses get quicker decisions than they would receive from their banks, and with fewer hurdles.”
