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Peer2Peer Finance News | October 24, 2017

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ArchOver seals FCA approval as it closes first dual-loan

ArchOver seals FCA approval as it closes first dual-loan
Anna Brunetti

BUSINESS finance platform ArchOver has gained full authorisation from the Financial Conduct Authority (FCA), which it said will be a pivotal step in achieving its £500m lending target in the next five years.

The platform has so far channelled £35m to small- and medium-sized businesses under interim permission, returning an average of 7.24 per cent to investors, but has recently stepped up its lending capacity and borrower range by introducing a second lending model.

“There is great satisfaction in gaining a stamp of approval,” said the firm’s chief executive Angus Dent (pictured).

“Our industry leading policies and procedures will allow us to take alternative forms of lending to the next level.

“At a time when investors are experiencing low interest rates and banks are tightening the purse-strings, P2P lending offers a unique and much needed service.

“Incorporating the most successful elements of P2P lending into the regulations and strategy of the FCA is critical to raising awareness and protecting the long-term success of the industry.”

Read more: FCA to push for global fintech framework

The platform’s original “secured and insured” model facilitates fixed-term loans secured on companies’ accounts receivable (AR), which are then insured by ArchOver’s credit insurance and debt recovery partner Coface.

Conversely, the “secured and assigned” finance model launched in January allows it to arrange loans secured against the borrower’s future contracted revenue, with ArchOver taking assignment of all recurring contracts.

This has opened up a new business avenue to the platform, which can now service a different type of fast-growing firms.

Ashlee Dutton, marketing manager at the platform, told Peer2Peer Finance News that the firm has just arranged its first dual-loan and is very keen on repeating the structure, as it delivered more flexible, sizeable and fast finance to the same borrower and allowed lenders with different investment preferences to participate in the same funding round.

It consisted of a £1.1m funding batch to the same company split between a £600,000 secured and assigned loan and a £500,000 secured and insured loan, with some investors choosing to participate in both.

ArchOver has already raised £1.7m through the new type of lending since its introduction, which caters for fast-growing, early-stage companies that need larger loans, particularly in the tech sector.

Read more: City slickers: institutional investment in P2P