The World’s First Insured and Secured P2P Platform Arrives

By AltFi on Wednesday 18 June 2014

Alternative Lending

A newly launched peer-to-business lender is bringing a unique, potentially game-changing product to the market – becoming the first platform to offer insured and secured lending.

ArchOver celebrates its launch today after months upon months of careful planning and fine-tuning. The platform is placing security at the heart of the proposition by providing lenders with an insurance backed product – underwritten by Lloyd’s of London. This partnership will ensure that 100% of the loans on the platform are insured. Atop this, borrowers on the platform must maintain their accounts receivable at 125% of the loan. This provides an added layer of security as well as a sound method of identifying early if a business is struggling.

Angus Dent, CEO of ArchOver, explained:

“Lender security is our prime concern. On behalf of the Lenders we register a first charge over the Borrowers’ accounts receivable (debtors) and, as an added level of security, we also insure that debtor book through Lloyd’s. This achieves two things: it lowers the risk to Lenders and it also allows the Borrower to benefit from the creditworthiness of its customers.”

“The security and insurance is always in the lenders name and all payments are through trust accounts. Personal guarantees are rarely enforceable and asset based securities are difficult and costly to realize, our model gives rapid recourse in the event of default to our lenders.”

ArchOver has already secured significant backing from the insurance and financial services group Hampden. The platform has also attracted a number of parties to its Cornerstone Investment Group – which will invest alongside ordinary lenders for up to 50% of all loans.

As the peer-to-peer sector has evolved, investor protection is one of the key areas in which new entrants have sought to outdo their predecessors. Has ArchOver produced the best attempt yet? We’ll track the platform’s progress with real interest. 

We’ve briefly summarized the proposition for lenders and borrowers on the platform below.

Lenders:

  • 5% fixed return with no charges.
  • Loans start at £5,000.
  • No auctions or due diligence required of lenders as all borrowers are secured and insured.

Borrowers:

  • Target borrowers will seek a minimum of £75,000.
  • Borrowers pay a headline rate of 6%.
  • 2.5% up front platform fee.
  • The borrower must pay to be insured by Lloyd's itself - price will vary case-to-case. 
  • Simple application process that leaves borrowers in control of their sales ledgers.
  • Funds are for any legitimate business use. 

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