ArchOver ensures the longevity of its “secured and insured” peer-to-peer lending model.
SME lending platform ArchOver has announced a partnership with Coface – one of the world’s largest credit insurers. The deal creates future insurance cover of up to £100m. Coface specialises in the field of credit insurance for unpaid invoices, which suits the ArchOver model to a tee. ArchOver loans are secured against the value of a business’ accounts receivables, which have to be maintained at 125% of the value of the loan. Those accounts receivables are then underwritten by a “global insurance firm”. That firm – for the next £100m of ArchOver lending, at least – will be Coface. ArchOver has lent a little over £8m to date, according to the Liberum AltFi Volume Index UK.
ArchOver is touting the new relationship as a necessary means of keeping up with anticipated growth in lending volumes. Platform representatives have also indicated that the Coface commitment will reduce the cost of its loans, because every loan will have been rigorously due diligenced by both ArchOver and Coface. The new £100m programme will also speed up the process of receiving a loan through the ArchOver platform.
Perhaps most intriguingly, representatives of both sides of the £100m deal have hinted at international expansion. Angus Dent, CEO of ArchOver, said:
"The choice of credit insurance partner followed a lengthy selection process and reflects our view that Coface is best able to meet our current credit insurance requirement as well as accommodate our future plans to expand beyond the UK. We have teamed with a genuine world leader in the sector and, most important of all, both parties regard this not as one deal in isolation, but as a trading collaboration that will evolve for mutual benefit."
Frédéric Bourgeois, Managing Director of Coface in the UK & Ireland, struck up a similar tune:
"Coface always strives to support businesses and develop markets so this partnership is perfectly aligned with our objectives. ArchOver's approach to protecting its lenders is one that we like and fits in very well with our own thinking and business model. We are looking forward very much to working with the ArchOver team to explore the future in the UK and beyond."