What is ArchOver and how does it work?
ArchOver is a peer-to-peer business lending service, connecting UK businesses requiring finance with investors seeking a secure and favourable return.
Our Borrowers are established UK businesses, with assets against which the loan can be secured. The loans are most often used to increase working capital and to replace invoice financing, factoring or bank overdrafts. The loan sizes range from £250,000 to £15m and offer a fixed term from 3 to 36 months. All Borrowers must pass our thorough credit analysis before the loan is posted on the platform for Lenders to invest in.
Normally loans are secured with an all-assets charge over the Borrower’s business and registered at Companies House. All Borrower revenues flow through controlled bank accounts owned by ArchOver, and the value of the security and management accounts are monitored monthly throughout the loan term. We also site visit at least once a year. Lenders must always check the loan specific security description prior to investing to understand the security for that loan.
The funding process takes place on our platform, where the loan, or ‘project’ as we call it, is posted for the Lenders to view. Each project is listed with the Borrowing company’s details, the reason they are seeking finance, the rate the Lender will receive, the loan term and the loan security.
Our Lenders are individuals, institutions (including our parent company that has ‘skin in the game’), all investing on the same terms. We do not operate an auto-bid function; the Lender always decides* where their money goes. When a Lender sees a project that they would like to invest in, they make a ‘pledge’ in multiples of £1,000**. Only when a Lender has pledged will they be asked to transfer funds.
When a project is fully funded, it enters a ‘cooling-off’ period before drawing down.
Loans are funded on either an interest-only or amortising basis. Lenders will receive their interest payments monthly, with a capital repayment at the end of the loan term when funding an interest only loan. Lenders who have funded an amortising loan will receive a proportion of their capital back each month plus interest on the remaining capital. Borrowers may choose to pay off their loan or refinance, and Lenders may choose to reinvest or be paid back at the end of the term.
* Investment Plan option allocates to the next available loans
** Investment Plan has a minimum investment of £250