ARCHOVER has launched a new lending model, so that it can cater to a wider range of business borrowers.
The peer-to-peer business lender specialises in a so-called “secured and insured” model, facilitating fixed-term loans for companies secured on their accounts receivable (AR), which are then insured. It sees this as a unique selling point, offering lenders an extra layer of security.
ArchOver is now expanding its offering to include another model, which it calls “secured and assigned” business loans. These loans will be secured against future contracted revenue, with ArchOver taking assignment of all recurring contracts, but these will not covered by credit insurance like the AR in the “secured and insured” model.
ArchOver will continue to take an all-asset charge over the borrower’s company and have all revenues flow through a controlled bank account owned by ArchOver.
A spokesperson for the platform told Peer-to-Peer Finance News that the new lending model means ArchOver can facilitate loans for different types of businesses, including those with recurring revenue models rather than AR.
Business borrowers seeking a “secured and assigned” loan must have a longer track record to qualify, the spokesperson said. Whereas businesses must have been trading for two years to qualify for a “secured and insured” loan, businesses seeking an “secured and assigned” loan must have been trading for three to five years.
Secured and insured loans will remain a major part of ArchOver’s offering, with new lending models continuously being reviewed.
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“We are continuously reviewing opportunities that benefit both our lenders and borrowers,” said ArchOver’s chief executive Angus Dent (pictured). “Lender security has always been the back-bone of our business and we are delighted that we can find additional loan opportunities that align with our values and that are also attractive to our lenders.
We are always striving to improve our services and provide multiple lending opportunities to our investors, which means we must continue to build our borrower pipeline. Most importantly, there are many established UK businesses that need help to grow, but cannot access the financing they require due to the endless red-tape and reduction in SME banking services.”
ArchOver’s first secured and assigned loan will be for Ergowealth, a firm of chartered financial planners based in Marlow, Buckinghamshire. The funding will be used to accelerate the firm’s growth strategy and to expand its newly-launched mortgage advisory services.
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ArchOver effectively offers a longer-term solution for companies in need of regular invoice financing. It has lent over £27m to UK-headquartered businesses since launching in September 2014. The minimum investment threshold is £1,000, with lenders receiving returns of up to eight per cent per year, with no defaults or losses to date.