Borrower Service – Secured & Assigned
Borrower rates from 9.5% p.a.
- First all-assets charge against business
- Secure finance against contracted recurring revenues
- Contracted revenue contracts confidentially assigned to ArchOver
- Credit analysis, monthly monitoring, controlled bank accounts
An increasing number of companies provide the use of their assets, be they physical or intangible, under rental or licencing agreements. These agreements provide the supplying company with long-term contracted revenue streams, making the businesses stable, predictable and potentially ideal Borrowers.
This was the second service we introduced.
ArchOver can facilitate a loan of up to 30% of the value of existing contracted recurring revenue. This is on the basis that there is a good spread of customers, ideally hundreds of customers all paying a similar amount of money each month, and that the churn of customers away from the Borrower is less than 10% p.a..
We register a first all-assets charge at Companies House over the borrowing company. This means that, if the Borrower defaults and we appoint an administrator, we have the first charge over the company’s assets. We perfect this with an ArchOver controlled bank account into which payments from Borrower customers flow. Except in the event of insolvency proceedings, the controlled account is cleared each day to the Borrower.
ArchOver charges Borrowers a marketing fee of 4.8% of the funds successfully raised. This is a one-off fee paid by deduction from the loan facilitated. We use standard documentation when completing the loan, and there are usually no legal fees to be paid. In the unlikely event that there are legal fees to pay, we will advise you of the fees in advance, invoice them to you and deduct them from the loan monies when they are drawn down.
By way of example, suppose your business has 200 contracted customers each paying £2,000 per month or £24,000 p.a., ie, the potential Borrower has contracted recurring revenue of £4,800,000, with a churn rate of 2%, we could facilitate a loan of £4,800,000 x (100%-2%) x 30% = £1,400,000.
Lenders: Your capital is at risk and interest payments are not guaranteed if the borrower defaults. Historic loan default rates are not necessarily indicative of future default rates. Lending over the ArchOver platform is not covered by the Financial Services Compensation Scheme. The current average return is based on the total amount raised over the platform. It is the result of calculating the average Lender return, before tax, of every loan funded over the ArchOver platform. Borrowers: In the event of default, ArchOver will seek to recover assets to the full value of the loan. Understand more about: Detailed Risk Warning, Defaults, Recoveries & Losses, General FAQs .