Borrower Service – Secured & Insured
Borrower rates from 9.5% p.a.
- First all-assets charge against business, registered at Companies House
- Secure finance against Accounts Receivable (ARs)
- Accounts Receivable credit insured against late or non-payment only
- Credit analysis, monthly monitoring, controlled bank accounts
Our original and core service.
We review the history of a prospective Borrower’s business, but are a lot more interested in its future. A potential Borrower would be required to demonstrate to us how they will provide security over the loan throughout the loan term as well as how they intend to pay the monthly interest. To do this successfully, the borrowing company would need to provide historic management accounts and a forecast prepared on a reasonable basis that can offer a full explanation. Ideally, we would require a written business plan from which the forecast is drawn.
For security, we look at the Accounts Receivable (ARs) – trade debtors, plus contracted work-in-progress (WIP). We review the ARs as two pools of assets; we don’t look at individual invoices or contracts for WIP. These pools fill as contracts are won - work is done and work is invoiced, and empty as WIP becomes debtors, and debtors turn into cash. We require reporting on the level of WIP and trade debtors within seven days of each month end. The maximum loan advance is a combination of 50% of the value of the contracted WIP plus 90% of value of the trade debtors (including VAT).
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. If, for some reason, we cannot do this, we will not be able to facilitate an S&I loan. However, we may be able to facilitate a Bespoke loan instead.
We perfect the charge 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.
For an S&I loan, we require the security provided by trade debtors and contracted WIP (the assets forming our security) to be enhanced with credit insurance. If Borrower already has credit insurance that’s good, as long as ArchOver can be added to the policy as Joint-insured and Loss Payee. If your company does not have credit insurance, we can help by giving you access to our Coface-based wholesale policy. The Borrower pays for this insurance.
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 usually there are 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 credit insured debtors of £500,000 and credit insured WIP of £250,000 – we’d be able to facilitate a loan of £500,000 x 80% + £250,000 x 50% = £525,000. The cash amount you would draw down is £525,000 x (100% - 4.8%) = £499,800.
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 .