ArchOver are a secured P2P lending platform focussed on Small business loans over 3 months upwards and a minimum of £100,000, maximum of £5M. For the investor a minimum of £1,000 is asked to get involved and a maximum of 50% of the stated loan amount. Formed in 2014 and backed by the Hampden Group, they have lent funds of over £31M to 28 borrowers through 1,200 investors, securing an average of 7% return. With an average pledge of £5,000 and average loan of £260,000 they have to be circumspect in their selection process. The firm was founded on three principles: low bank returns, risk aversion from banks who traditionally loaned to the SME sector and security for the lenders risking cash to encourage involvement. The latter is achieved through loans secured and insured against accounts receivable or against recurring revenue. Obviously, the ArchOver team performs oversight of the businesses requesting loans before placing them on the marketplace page of their website and monitors them monthly.
From the point of view of the average punter things are pretty straightforward though without a great deal of choice. At the time of looking there is only one available though 3 had been filled within two weeks. The one available looks pretty interesting though. A supplier of pharmaceutical and analytical services with 123 staff is asking for £750,000 in funding. The offer is for 6.5% over 12 months interest only with bullet repayment, so interest paid every month and the capital paid back at maturity. Estimated 2017 performance is £18M revenue, £2.7M profit and £3M assets. Whether you consider this a good risk or not is up to you, but the information is good, especially the risk tab on the profile page which contains information that only someone from that particular industry may think to include. There is no direct line to the business operatives, so enquiries should go through ArchOver. They intend to introduce a secondary market in the future, however at the moment there is no breakdown of how previously filled loans are performing if you have not loaned money to them. If they get the secondary market going then this should be transparent. One major irritation about the site is that once you are logged in you can only view the dashboard and have to log out to view the more educational material. This could surely be easily corrected. It can’t be an advantage to have to log out just to read a blog post.
This enterprise is geared towards those looking to get a return on cash or just looking to park it somewhere outside of a bank. The involvement level of £1000 together with bullet capital repayment will probably rule out 99% of the population so it is more for the well heeled. You do not feel part of the business you are lending to and you are not encouraged to contact them. That said, you have a secured and insured asset with no fees for lenders for lending. In the case of a default then fees do get levied but it must be said that their record on that level is nothing short of impeccable. They have never had any missed payments, losses or recovery proceedings. This is a site for people with a very healthy bank balance who are looking to get an income from the interest and for whom locking up a sizable amount of capital for perhaps three years is not painful.
