ArchOver is a peer to business lender that specialises in secured and insured loans against Accounts Receivables (AR). Since their launch in 2014 they’ve funded around £30 million in loans. They state an enviable track record of no missed payments or defaults whilst offering high interest rates of 6% to 8.5% to their lenders.

ArchOver advertise borrowers for a trade loan would pay 7.45%-7.95% ongoing interest, a one-off marketing fee of 4.8% and credit insurance of 0.15% of turnover: so potentially 13% on a typical one year loan. Lenders would then receive between 6% and 8.5% interest. ArchOver lends against the Accounts Receivables of SME businesses at a max Loan to Value of 80%. Accounts Receivables are the outstanding invoices owed to a business by its debtors: when they’ve sent the bills off for work done and are waiting for the payments to come through. Small and medium businesses typically wait 71 days to be paid by their debtors, so Archover provides a valuable service to free up this cash earlier. ArchOver then insures the ARs to add additional security.

ArchOver are backed by the Hamden Group, who are both investors in the platform itself and invest in some of the lending opportunities. Hamden Group manages insurance assets worth more than £2billion. The Group CEO of Hamden Group, Stephen Harris, is also a Non Executive chairman of ArchOver. If ArchOver ceases to trade, Hampden are “contractually bound to ensure ArchOver remains operational through the term of the loan book run off”.

Article first written March 2017, updated May 2017 to add the new Archover referral/ refer a friend cashback offer.

Key Facts:

Expected Returns: 6%-8.5% gross interest before defaults
Provision Fund: No provision fund, but AR’s insured
Sell Out: Not directly, though potentially via Asset Match (more details below)
Minimum Investment: £1,000
Cashback: £75 cashback for new investors who invest £5,000 within 90 days via this referral link.
Innovative Finance ISA:  Not Yet.

Archover Review

New investments, called ‘pledges’, are made from your Investment Opportunities dashboard:

Screenshot from the ArchOver website, all private details greyed out.

Each pledge has a minimum of £1,000, and larger investments must be in multiples of £1,000. The interest rates shown are after all fees and expenses (as opposed to Funding Circle for example who charge 1%). Once you decide to pledge, you are directed to a payment details page. You then have 96 hours to transfer the funds.

Interest is paid monthly directly to your bank account, rather than held in a platform account as on most other P2P lending sites. 100% of the capital is returned at the end of the loan term assuming everything goes to plan.

Every time a new loan is launched, you get an email with details and an invitation to invest:

There’s no automated investment setting. Borrowers must match ArchOver’s minimum requirements:

• Trading for at least 2 years
• Turnover of at least £2m to support £100k + loans
• England & Wales or Scottish Registered Business
• Trade Business to Business
• Have a Credit File
• Have an Accounts Receivables balance which a loan can be secured against – 80% LTV

As the loans are secured against the Accounts Receivables, it’s important that ArchOver keep on top of the borrower’s books. ArchOver say:

A Borrower must report their debtor book (Accounts Receivable) on the 5^th of the month. We check this against forecasts and ensure that there is a minimum 125% Value to Loan (VLT). The Borrower must also send their full management accounts on the 20^th of each month so we can check these against forecasts to keep a close eye on the health of the business. We also do a site visit every six months.

ArchOver claim to take a ‘zero tolerance’ approach to late payments from borrowers. This makes a pleasant change from some other platforms which appear to accept any excuse they can, perhaps to avoid a black mark in their statistics or crystalise a claim on the provision fund.

Early Sell Out

There’s no secondary market to sell out of loans early. The lender FAQ’s state that they ‘anticipate’ this launching sometime in 2017, but there are no guarantees. For now, lenders can only sell out of their investments via a third party service: Asset Match. Asset Match operates a secondary market for some early investment companies (e.g. those on crowdfunding sites) and some P2P loans.

I signed up for Asset Match a while back to have a look, from memory it looked quite basic and probably low volume. I tried to log in again now to add a screenshot for this review but had forgotten my password. Unfortunately Asset Match’s forgot your password ‘feature’ is out of order at the moment. Not exactly a positive first impression. The screenshots will have to wait.

Cooling Off Period

After you invest in a new loan, ArchOver give you 14 days to change your mind. In their FAQ’s they state:

The Financial Conduct Authority (FCA) stipulates that all P2P lending platforms must have a cooling off period of 14 days for every lending opportunity – this applies to both Lenders and Borrowers. Your 14 day cooling off period starts from the date you make a pledge.

This is interesting, because I haven’t seen it offered so openly to lenders on other platforms!

Non-UK Residents

Non-UK residents may be allowed to lend, but only at the discretion of ArchOver. If you have a UK bank account and permanent UK address you should be able to open account, subject to the normal KYC (know your customer) and anti money-laundering checks.

Summary

ArchOver Pros

• Easy to value asset (Accounts Receivables)
• Underlying assets insured
• Strong track record (no missed payments since founded in 2014)
• Ongoing interest paid direct to bank account

ArchOver Cons

• No built in secondary market, you have to use Asset Match
• Higher minimum investment (£1,000 per loan)

Note: since first writing the review in March 2017 Archover have added a refer a friend offer for new customers who join up via an Archover promo code and pledge £5,000 in the first 90 days. You can either join up via the referral link above which automatically fills in the promo code in the relevant space, or manually enter the promo code “MCG1028” in the promo box on sign up. This was added on May 30th 2017.

*Referral links also pay me a commission as the referrer. P2P platform reviews are written objectively and any affiliate or referral codes are added later. These go towards building and improving the site.