ARCHOVER has extended its agreement with credit insurer and collections company Coface for a further three years.
The peer-to-peer business lender helps facilitate fixed-term borrowing for companies secured on their accounts receivable, which are then insured. It uses this “secured and insured” model as a key selling point, as it says it provides extra security for investors.
ArchOver said on Tuesday that the extended deal with Coface will provide continued protection to all its lenders through the use of £100m of borrower turnover cover.
“We began our partnership with Coface a year ago because we identified the need to offer our lenders insurance cover and to bring a distinctive element to our offering which has allowed us to stand out in a sector that is heavily criticised for lax security and monitoring,” said ArchOver’s chief operating officer Ian Anderson.
“The agreement has contributed to our ability to complete two years of operations without a single bad debt, late payment or default.”
Anderson added that by using French-headquartered Coface, which operates internationally, the partnership will support ArchOver’s future expansion plans.
ArchOver effectively offers a longer-term solution for companies in need of regular invoice financing. It has lent just over £25m to UK-headquartered businesses since launching in September 2014. The minimum investment threshold is £1,000, with lenders receiving average returns of 7.25 per cent.
The average loan size is £300,000 and lasts between three months and two years. Borrowers pay 7.95 per cent per year in interest on a one-year loan and 8.45 per cent on a two-year loan.
ArchOver is not a member of the Peer-to-Peer Finance Association, the trade body for the industry. However, it has submitted loan book data to the newly-launched OFF3R Index, which will be updated on a quarterly basis using statistics gathered from eight P2P platforms: Zopa, Landbay, RateSetter, ArchOver, Marketinvoice, Lending Works, Funding Circle and Thin Cats.
ArchOver is not the only P2P platform to use its insurance as a selling point. Lending Works calls itself “the first P2P lender with insurance against borrower default” and claims it is the only lender that has insurance against borrower defaults, fraud and cyber crime.