Tag: borrowers

P2P LENDING PLATFORM ARCHOVER SELECTS LEWIS FOR UK COMMUNICATIONS CAMPAIGN

Author
Ashlee Dutton
Date

LEWIS, the global communications agency, has been selected by ArchOver, the P2P business lending sevice, to deliver a communications programme aimed at driving greater awareness of alternative financing among small-to-medium businesses and investors in the UK.

ArchOver provides UK based SMEs with the facility to borrow from £250,000, where the loans are secured with an all-asset charge over the borrower’s business and registered at Companies House. Unlike other peer-to-peer lending facilities, all borrower revenues flow through controlled bank accounts owned by ArchOver and the borrower, and the value of the security are monitored monthly throughout the loan term. This combined approach of an all-assets charge, control over the cash flow and monthly monitoring provides enhanced security to the lenders. This differentiator has attracted a range of individuals seeking a secure and favourable return on their investment, currently up to nine per cent per annum. The business is growing rapidly with ArchOver having already lent over £37m, secured full FCA authorisation and generated an average return of 7.26 per cent to its investors.

In a competitive pitch process, ArchOver selected LEWIS for its approach to driving awareness as part of an integrated marketing strategy to attract new lenders and borrowers to the platform. LEWIS will use its storytelling approach to explain and evangelise the merits of alternative financing.

Ashlee Dutton, marketing manager, ArchOver, said, “We chose LEWIS because they showed very clearly how they would engage our target audiences with the right content across the right channels. They demonstrated market knowledge, strategy, and creative storytelling. We are excited about the partnership and have already seen some great results in the short time we have been working together.”

Ruth Jones, Deputy Managing Director UK, LEWIS said, “UK SME’s are the growth engine of the economy yet traditional financing is hard to secure for the majority. ArchOver’s P2P lending platform is disruptive as it provides a new platform for borrowing, while giving individuals a safer way to realise better returns. We are excited to be part of the team that gets to share the ArchOver story.”

ARCHOVER PARTNERS WITH ESCALATE TO OFFER INCREASED SECURITY AND RAPID DISPUTE RESOLUTION

Author
Ashlee Dutton
Date

London, UK – 14 June 2017 – ArchOver, the peer-to-peer (P2P) business lending platform, has announced it is the first UK lender to partner with Escalate, a fixed-cost commercial dispute resolution service for SMEs. The partnership will enhance ArchOver’s ability to provide secure loans to the SME market, helping borrowers to bring in disputed payments and enhancing security for lenders as a result.

Escalate’s rapid no-win no-fee dispute resolution will enable ArchOver to recover any contested assets used as security for loans over the ArchOver platform, further enhancing its market-leading secured lending services. Escalate will ensure that lenders on the platform are protected by ensuring contested debts are paid and repayments can be made on time, working in tandem with ArchOver’s insurance partner firm Coface and the company’s all-asset charge on borrower assets.

Borrowers who don’t have time to chase down their disputed debts will also benefit from Escalate’s resolution service by using it to recover invoices that could be used for additional security. This will ultimately increase the amount they are able to borrow.

“Within the SME market, all sorts of debt tends to be written off due to the time and money it takes to chase debtors down,” explained Ian Anderson, ArchOver COO. “With Escalate on board, we will now be able to help SMEs to recover that debt, managing their cash flow and increasing their ability to access essential funding as a result. Combining our monthly monitoring and insurance policies with Escalate’s dispute resolution will also enable us to provide that extra level of assurance for our lenders, reinforcing ArchOver’s position as one of the most security-focused P2P platforms in the market.”

Escalate was created by a group of leading professional services businesses to bring fixed cost, no-win no-fee services to commercial dispute. It combines the capabilities of accountancy firms PKF Littlejohn, Haines Watts and Price Bailey with law firms such as Bermans and Moore Blatch, and the expertise of Flaxmans, a legal expenses provider and insurance claims mediation specialist.

Chris Clay, one of the architects of the Escalate process, said: “Escalate’s successful launch has been sup-ported by its network of forward-thinking partners that recognise the platform’s genuinely disruptive of-fer. ArchOver shares our ambitions, ethos and commitment to shaking up the market, so partnering with them was a natural next step for us.‎”

Conflicting Information

Author
Angus Dent
Date

It is sometimes difficult to know who to believe when there is conflicting information emanating from two supposedly reputable sources – the pre-Brexit propaganda war immediately springs to mind. In this case, we have the NACFB proclaiming that there is a ‘plethora of lenders’ in the market, while Small Business recently reported that 1,093 small companies are expected to cease trading in January through lack of finance. This sits alongside other, equally alarming statistics such as the fact that 3,633 business failed in Q3 of 2016 and that only 41.4% of UK businesses started in 2010 survived to their fifth birthday.

Of course, some of the companies heading for the drop will not have been up to standard in the first place, but it beggars belief that they should all be in this category. Is it that the owners of these businesses simply don’t know what sources of finance are available and don’t know where to turn? Or is the NACFB mistaken? Either way, there is clearly some kind of information gap.

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We know from other sources that, partly due to the uncertainty surrounding Brexit, SMEs are currently of a mind to borrow less and to hold on to more of their cash; according to the British Bankers Association (BBA), SME lending in Q3 2016 dropped 13% against the same period in 2015. The BBA also revealed that SME deposits have risen by 5% to over £170bn.

The trends suggest fear of what the future may hold. Many SMEs are trapped in a cash flow squeeze brought about by staff who expect to be paid monthly and suppliers who routinely pay on 60 or even 90 day terms. What do you do – turn away business that might give you a 30% profit margin or borrow the working capital which may cost the equivalent of 10%? The logical answer may not be immediately apparent to everyone.

Invoice finance undoubtedly has its place in the market, but it is no panacea. Because of the high costs involved in terms of fees and maintenance, at worst it can be an expensive fix that suits the provider far more than it suits the SME.

Subject to appropriate due diligence processes and appropriate security, P2P loans are available to help with a wide variety of problems, including short term cash flow. They are also available to companies that want to borrow to invest and grow. There is no stigma attached to borrowing money for the right reason and at the right price. There has never been a better time.

 

A Response to Robert Reoch’s article on The Growth Outlook for Market Place Lending

Author
Angus Dent
Date

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Thomson Reuters recently published an informative blog post in which Robert Reoch offered his views on the “growth outlook for marketplace lending.”

In his role as Global Head of Products and Strategy at Crowdnetic, a provider of technology and market data solutions to marketplace lending companies (MPLs), Robert is part of a team which aims to educate investors and institutions on the direction in which the  alternative finance industry is moving. MPLs have been quick to offer an alternative finance source to SMEs, providing a service distinct from the antiquated and costly financing options that banks in particular had been providing. And as the industry has grown, innovation by FinTech companies has seen the provision of increasingly niche and bespoke services, as competitors attempt to stand out from the crowd and bid to woo investors. Yet I agree with Robert’s statement that “there is real economic benefit for banks to actively collaborate with MPLs” in order to attract prospective borrowers.

MPL subsets

The MPLs that are most successful could be those that actively maintain a symbiotic relationship with a specific bank or banks. The banks would provide the MPL with a network of suitable borrowers who at the moment just aren’t aware of the opportunities out there.In return, as pointed out by Robert, banks can keep their fee-paying client “without the associated balance sheet and the capital cost”. In light of such exposure, the cost is minimal for the MPL, who would also save on often unnecessary and expensive advertising campaigns, especially as a much smaller group of institutions rather than a large pack of individuals is increasingly seen as the future of the ‘crowd’. This in turn helps Borrowers, who can receive funding faster and with a lessened prospect of a project going unfunded.

MPL bank lending

As Robert alluded to, it remains to be seen how much of the enormous market MPLs can gain access to. After all, a percentage point or two would transform the MPL industry and create a flood of funding to SMEs. The timing couldn’t be better. UK business lending from banks in June 2015 saw the sharpest fall – almost £5.5 billion – in at least four years (since records began). And with SMEs positioned as the main drivers of UK GDP, it is in the best interest of all involved that these businesses receive the finance they need to grow. Marketplace lending companies will be chomping at the bit to fill the void left by the banks; it remains to be seen when the shift happens.