Charlotte Marsh, managing director at ArchOver, a peer-to-peer (P2P) lending platform supporting SMEs business borrowing, has argued that the COVID-19 outbreak can be viewed as a key opportunity for P2P lenders to provide long-term funding to businesses struggling to cope with the economic challenges created by the pandemic.
In an interview with Peer2Peer Finance News, Marsh noted that ArchOver has seen significantly more borrowers looking for capital on a long-term basis, because the UK government’s emergency loan packages only offer short-term relief to local businesses.
Banks in the UK have been working constantly to process Coronavirus Business Interruption Loan Scheme (CBILS) applications. Many financial institutions have decided to only cater to their existing client base, due to the large number of applications.
It’s possible that P2P lenders could continue to provide other funding channels to companies that need working capital but might not qualify for loans under the current CBILS scheme, Marsh said.
She remarked:
“There’s a good opportunity for ArchOver and other P2P lenders to support those businesses they lend to and continue to lend to.”
She claims that her platform has received more enquiries recently, because banks have been busy trying to allocate CBILS packages to many other businesses
She added:
“Loans for working capital to businesses that need it are being met with strong interest from investors on the crowd. It’s continuing to support the economy. There’s opportunity there to serve clients who need money.”
Marsh acknowledges the potential advantages of working with government-financed loan schemes to assist businesses on a shorter-term basis during the current crisis.
She confirmed that ArchOver is holding discussions with the British Business Bank, so that it can become accredited to offer CBILS loans.
She thinks that the UK should approve more P2P lenders for the CBILS program, but she notes that it would depend on how the funds are allocated.
She also pointed out that CBILS only uses institutional funds, however, she believes there could be enough individual money that may be distributed.
Marsh confirmed that ArchOver will be offering new secured lending again. The P2P lender had suspended its secured lending deals, as it focused its efforts on unsecured lending, which is offered via its ‘Advances’ product.
