ArchOver, a peer to peer business lending platform, launched in 2014 to help UK businesses gain access to finance. To date, they have facilitated over £46m in funding for SMEs, successfully helping them achieve their growth goals. Here, we catch up with Angus Dent, the company’s CEO, to find out what happened next.
In today’s communications-led world, bringing businesses who want to raise finances together with the people who have money to lend is often trickier than you would expect. Why is that?
There’s too much noise, too many messages, too many people trying to sell things, we all zone out, there’s no choice and then we miss the things that interest us, or are to our advantage. The communication age has made communication too easy. And of course without this ease we’d have no business. I’ll give over moaning.
Which size of business has struggled most to raise finance?
All sizes. Today it’s particularly difficult to borrow a fixed amount, not invoice discount or factor, between £500k and £10m.
How can you ensure potential lenders have enough security?
You can’t ‘ensure’ there’s enough security. Everyone views security differently, so we try to do our best to identify companies that are in the growth stage, have a proven management team and will benefit from the financing… and, most importantly, make the monthly interest payments. So far we’ve done a good job with no defaults, losses or late payments. All our loans are secured against a company’s assets and a secondary level of security is usually placed in the form of credit insurance or assignment of contracts. We perform a thorough, appropriate credit analysis before a loan is facilitated and after it’s been made we diligently monitor the business and its accounts each month.
And, equally, how do you make sure the businesses that want the money are treated fairly?
The simplest answer is that we keep things as consistent and transparent as possible, to help borrowers – and potential borrowers – get on with the job of growing their businesses. The loan amount and term is fixed, there are no facility fluctuations so the borrower can rest assured that the amount they receive upon drawdown is available throughout the term. We don’t take personal guarantees, so the directors can keep their personal lives separate from the business. Our fee structure is clear and transparent from the outset, there are no hidden fees to borrow. Our monthly reporting process is straightforward, so businesses can come to us knowing they won’t be bogged down with endless admin. And we respond promptly. We appreciate that a “no” given quickly is better than a never-ending “maybe”, and where possible we follow this with an introduction to others that can help.
What does ArchOver bring to the table?
Cash for businesses so that they can grow. We provide fixed term, fixed rate, interest only loans, allowing companies to plan effectively and efficiently for the future. Lending is either secured against a company’s accounts receivable (debtor book) or their future contracted revenue. We like helping businesses that may be stuck paying too much for a facility or have an existing facilities that won’t lend more due to their own internal restrictions or ridged policies that don’t allow further analysis on the business. It’s not that these companies aren’t creditworthy, it’s more so that they aren’t being reviewed or given the opportunity.
How do you differ from the competition?
No personal guarantees, no fees for early repayment, interest only and usually a larger advance. We get to know the business, we don’t just look at the surface and make a decision. We investigate the business, get to know the management team and if the business can support a loan we facilitate it. Others also aren’t lending against future contracted revenue, something we are starting to become known for.
What are the underlying principles that guide the way you work?
Always try to help and call a spade a spade.
Essentially, why should people – either investors or people who want working capital – do business with you?
Investors because we’ll provide them with a secure and favourable return. Borrowers because we’ll take an interest in their business and provide the funds they want/need in a suitable form and if we can’t we’ll point them to somebody who can.
What are your ambitions for the future?
Keep building ArchOver and helping lenders and borrowers. Achieve £60m in lending by the end of 2017, with the goal to lend £50m in 2018.
Click here to see some ArchOver case studies.
ArchOver is a Peer-to-Peer lending platform that facilitates fixed term, fixed rate loans for UK businesses. Connecting businesses requiring finance with investors seeking a secure return, to date, ArchOver has helped provide over £46million of financing for UK SMEs and delivered Lender returns of up to 9% p.a. ArchOver is a member of the long-established, privately-owned Hampden group, and is fully authorised and regulated by the Financial Conduct Authority (FCA). Capital is at risk.
