Peer to peer (P2P) business lender ArchOver recently claimed that it has seen a significant increase in demand from retail investors as the platform prepares to begin lending again via its secured loan offering.
According to its website, ArchOver has funded over £119 million for UK SMEs with an average interest paid to investors of 8.16%. Typically, loans are secured by a “range of assets” with short term, unsecured credit offerings generating a higher return for investors.
ArchOver has been busy managing its loan book while extending support to its existing borrowers.
As first reported by Peer2Peer Finance News. the company said that the “unprecedented” demand from its investors has come after it performed a survey to check whether its clients were still interested in exploring opportunities, given the challenges due to COVID-19.
ArchOver claims there’s been “record-breaking” activity in financing secured loans, with many of them being issued in minutes.
Charlotte Marsh, MD at ArchOver, stated:
“The vast majority of our secured borrowers have weathered this storm well and in fact some have seen significant revenue uplift. We will be opening secured loans for both our existing clients and new clients moving forward.”
Hugo Smyly, portfolio manager at ArchOver, noted that the P2P lender saw that investors appear to be confident again.
“There was initial concern among our base how Covid-19 would influence their investment strategy, but as the weeks have gone by there is a clear message from them that investing in successful UK businesses is an important part of their overall portfolios.”
ArchOver offers several other services including an unsecured lending product. The company says there has recently been considerable interest in its “Advances” product, which issues unsecured loans to initiatives supported by appropriate R&D tax claims and/or government-backed grant receipts.
Last year, Archover reported £1.34 million losses, which may have motivated the company to simplify its business and restructure its operations.
Marsh 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 last month, Marsh had 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.
Since inception, ArchOver reports five borrowers have gone into default. ArchOver posts additional information on losses and recoveries here.