The £1m deal has been dubbed by the platform as “record breaking” – the largest non-property related loan that has been funded within the peer-to-peer sector globally. The claim holds up to some extent, although “record equaling” would have been more appropriate. Nicola Horlick’s Money&Co. kicked off life in the P2P space with a £1m loan for Mecmesin Ltd.
The landmark ArchOver loan carries an expected return of 6.75% over a 2 year term. The borrower is specialist building restoration company TRC Contracts, which has worked on many a celebrated UK building, including the Savoy Hotel and Somerset House. TRC has been running since 1994, and sought an injection of working capital from ArchOver in order to stimulate growth.
The peer-to-peer lending is becoming gradually better equipped to handle bigger ticket deals. We now have a pair of £1m non-property loans closed. P2P property development loans have climbed as high as £10.8m in size. Crowdstacker – a newly launched peer-to-peer player that will firmly target the “M” of the “SME” lending market – carries a whopping maximum loan size of £50m. The platform’s opening auction is a £3m, property backed loan for Quanta Group, which closes in 11 days.
“Against the scope of global company funding, we are conscious that £1m is a flea bite but it is around 15 times the average loan for the sector and we are seeing upward pressure beyond that sum. We believe that closing the loan represents a real step towards the sector beginning to provide serious finance for those SME companies that are the heart of the UK economy.”