ArchOver’s managing director has said that Covid-19 presents an opportunity for peer-to-peer lenders to deliver long-term funding to businesses impacted by the public health crisis.
Charlotte Marsh told Peer2Peer Finance News that the P2P business lender has seen more borrowers seeking money for the long-term because the government’s emergency loan schemes only give a short-term boost to businesses.
Banks are busy with coronavirus business interruption loan scheme (CBILS) applications and many are only serving their existing customers, so P2P lenders can help fill the funding gap for businesses that require working capital but don’t meet the criteria for CBILS, Marsh added.
“We’re seeing opportunities pick up,” she said.
“There’s a good opportunity for ArchOver and other P2P lenders to support those businesses they lend to and continue to lend to.
“Banks are being tied up allocating CBILS, so we’ve had more enquiries.
“Loans for working capital to businesses that need it are being met with strong interest from investors on the crowd. It’s continuing to support the economy.
“There’s opportunity there to serve clients who need money.”
However, Marsh also recognised the benefits of government-backed schemes to help struggling businesses in the shorter-term during the pandemic.
She signalled her support for Peer2Peer Finance News’ ‘Back Our Industry’ campaign, calling upon the government to include more P2P lenders in delivering much-needed funding to small businesses and housebuilders.
She said that ArchOver is in talks with the British Business Bank to become accredited to deliver CBILS loans.
“I think more P2P lenders should be approved for CBILS, but it depends on the distribution of funds,” Marsh said.
“CBILS only uses institutional money but we have enough individual money that could be distributed.”
Marsh also revealed that ArchOver is restarting new secured lending. The platform had put new secured lending deals on pause with its focus on unsecured lending through its ‘Advances’ product which has seen strong interest. She said that investor appetite is still present, with projects still being funded quickly, and that its borrowers are well placed to weather the economic turmoil caused by Covid-19.
She added that the platform has actually seen some of its borrowers benefiting from the current situation, for example firms which provide technology services and healthcare providers experiencing increased demand from the NHS supply chain.
“We have a good feel what our client base wants and deserves,” Marsh said.
“Although there’s a downturn for some businesses, this time has led to an uplift for others.”