This is my independent ArchOver* review. ArchOver is a peer-to-peer lending platform that allows you to participate in loans to UK based businesses and receive interest of up to 10% per annum.
I’ve worked in banking as a Chartered Accountant for almost a decade and it’s my mission to review every peer-to-peer lending platform the UK has to offer.
Overall, ArchOver’s lending offering appears to have a solid record of loan performance with some evidence of good credit risk measures. Their online investing platform is also easy to navigate, if a little dated looking.
However, in my opinion, ArchOver does not provide enough details on their lending criteria and credit risk processes compared to other lenders. That is not necessarily an issue, but it would be nice to have more data. They still have a large number of positive reviews by lenders, and have been trading for almost 8 years.
Read on for my full ArchOver review, or use the links below to jump to a particular section. I hope that this ArchOver review will provide you with the information you need in order to decide whether it is right for you.
- ArchOver £75 Bonus Offer
- What Is ArchOver?
- ArchOver Review – How Does ArchOver Work?
- Is ArchOver A Good Investment?
- Who is ArchOver For?
- Does ArchOver Offer An IFISA?
- Is ArchOver Safe?
- ArchOver Reviews & Ratings
- Is P2P Lending Right For You?
- ArchOver Review – Final Verdict
*Archover £75 Bonus Offer
If you use the links in my ArchOver review to sign-up to Archover you will earn £75 in cash if you pledge £5,000 within 90 days.
This means that if you sign-up to ArchOver and fully participate in loans with a minimum of £5,000 of investment within 90 days then you will receive a £75 bonus in cash. Note that the cash will be paid into your bank account that you use to register and not into your ArchOver investment account.
In the interests of transparency, I will also receive a fee from ArchOver if you use my link to register. This does not affect my editorial independence – my views are never influenced by third parties – and I have included a link without the bonus offer at the bottom of this article.
What is ArchOver?
ArchOver is an online peer-to-peer (P2P) lending platform that allows you to invest your money in loans to British businesses.
ArchOver’s loans are primarily split between Secured Lending and Advances. Secured Lending involves loans to businesses backed by specific assets. Advances lends to businesses backed by outstanding receivables.
Secured Lending is the opportunity to invest in loans to businesses that are secured against a specific asset. In the event of default, where the borrower is unable to repay the loan, the lender can seek to make a claim against the asset the loan was secured against. This could be, for example, property or equipment that the borrower owns.
This form of secured lending is generally considered less risky than unsecured lending as it is backed by a (usually) physical asset.
ArchOver’s Advances loans are unsecured lending to a business which is not backed by a physical asset. They are, however, typically backed by another (less certain) form of receivable that the borrower is owed, such as outstanding tax credits.
I spent part of my career in banking working in the trade and working capital business of one of the largest corporate banks in the world. I saw up close how receivables finance works, which is effectively what ArchOver’s Advances loans are.
Often companies will have outstanding money owed to them which could be in the form of customer invoices not yet paid, or HMRC tax refunds for example. These companies would frequently prefer to have the cash now rather than wait for the invoices or refunds to be paid.
This is where they will approach a lender, such as a bank, or in the case of smaller companies, a P2P lender such as ArchOver. They will then borrow an amount of money now, secured against the other receivables that they are owed. This means the company will get cash upfront and have to repay it over time, ideally as they are paid the outstanding receivables they are owed.
When did ArchOver start?
ArchOver was founded in 2014 and registered with the FCA in October 2015. Since being established, it claims to have lent over £150m as of 2022 but it’s not clear if this includes lending that is used to extend existing loans.
This is where ArchOver may lend to a business multiple times which includes paying off earlier loans. For example, a business may borrow £500,000 from ArchOver over 2 years. After 1 year, they may have repaid half the loan and have £250,000 still outstanding. At that point they may apply for a new loan from ArchOver for a further £500,000, half of which will be used to pay off the existing £250,000 which is outstanding. The business may want to do this because after 1 year of successful repayments on the first loan, they are now considered less risky and are now able to borrow at a lower interest rate.
In gross lending terms, ArchOver has granted loans of £1,000,000. However £250,000 of the second loan was used to immediately repay the previous ArchOver loan. Therefore, effectively ArchOver has lended a net of £750,000 despite granting loans worth £1m.
Who owns Archover?
Hampden Group is the owner of ArchOver. They are a much larger financial services company which was formed in the 1970s.
Hampden primarily specialises in insurance and wealth management. They claim to directly invest in ArchOver’s loans, as well as owning the ArchOver business, which may give investors some comfort around the performance of the loans.
Archover team: Who are Archover’s key people?
The managing director of Archover is Charlotte Marsh and the COO and co-founder is Ian Anderson.
Both are registered with the Financial Conduct Authority. You can read more about them here.
Is ArchOver profitable?
ArchOver’s latest financial statements cover the period 1st January 2020 to 31st December 2020. In this period the company made a loss of £0.5m, which was a large reduction from the loss before tax seen in the prior year of £1.3m.
There are £6.6m of accumulated losses in ArchOver’s reserves as at 31st December 2020 according to their accounts. This has been supported in the past by the issuance of shares, presumably with Hampden Group providing the funding.
With losses reducing year-on-year and no capital injections required in the most recent accounts, I personally do not view ArchOver’s financial position as a risk. They also appear to enjoy the financial support of their much larger and profitable parent company, Hampden.
Archover Review – How does Archover work?
Once you’ve signed up to Archover, you must complete your full details as part of the Know Your Customer (KYC) regulations.
You will then be asked to complete a questionnaire centred around P2P investing to help check that you understand how it works and the risks involved. This is a regulatory requirement.
Once these checks are complete you will be presented with an account area where you are able to fund your account and make investments.
ArchOver’s loans range from £100,000 to £5m in value and can last for 3 months up to 5 years.
Each business looking to borrow money goes through a credit approval process. First, ArchOver’s commercial team will carry out a detailed review of the business, including meeting key personnel.
ArchOver says that this is done to ensure that the management team of the potential borrower is competent and has relevant experience. An overall review of the borrower’s business model and structure is also completed.
The next step is the ‘hard’ or quantitative review process of the potential borrower’s finances. This is essentially the credit risk assessment stage. According to ArchOver, this involves an in-house team of Credit Analysts who review and analyse the information provided by the prospective borrower.
Once all analyses are complete, the ArchOver team produces a Credit Paper which is then used for discussion at a Credit Committee meeting. From there, the decision to move ahead with the borrower is taken.
This process is a little different to that of a bank, which will usually focus more on the quantitative assessment rather than a business and personnel assessment. However, business banks and corporate banks usually have relationship managers who already know the prospective borrower well, so the credit risk assessment is usually more important.
It’s also unclear to me who sits on the Credit Committee and how qualified they are to make these decisions. But given the trading history of ArchOver and their backing by Hampden, it would be reasonable to assume that they are competent at assessing credit risk.
Looking at some of the previous projects, it looks as though ArchOver regularly lends to the same businesses. This is not necessarily unusual, but you should bear this in mind when investing in projects to ensure you have some diversity in the borrowers you lend to. You may not want to invest into several loans all with the same company.
What is ArchOver’s minimum lending amount?
To lend in an individual loan, the minimum you must invest is £1,000 which is a little high compared to other P2P lenders.
However you can invest starting from £250 in ArchOver’s automated Investment Plan option. If you opt for this, the amount you deposit into your account will automatically be invested into projects as they go live.
You should also bear in mind that, as with other P2P lenders, you cannot withdraw your money once it is invested until the loan is repaid. ArchOver does not operate a secondary market, where investors can privately sell their investment to other investors as some other crowdfunding platforms do.
The only exception to withdrawing your money before the loan ends is the cooling off period, where investors have 5 days after pledging to invest in a loan to withdraw it.
How many loans can I lend in?
There is no limit to the number of loans you can invest in. To reduce your risk, it’s a good idea to consider spreading your investment pot across multiple projects. Diversity in your investments applies to P2P lending as well as stocks and shares!
At the time of writing this review, there are currently no loans to invest in on the ArchoOver platform. That’s been the case for around a week now, so I will be updating this review once I’ve had the chance to actually invest.
The Investment Plan auto-invest option may be worthwhile here if you don’t want to keep checking what’s available in the ArchOver platform. Your money will simply be invested as projects go live.
That being said, ArchOver will email you when new projects are going to go live so you do get some notice.
How good are Archover’s interest rates?
For ArchOver’s Secured Lending investments, the target interest rate is up to 9% per annum. On Advances, it’s higher at 10% per annum which reflects the higher risk level.
The Investment Plan option, which auto-invests into multiple loans for you, the target interest rate is 7.4%. This interest rate also takes into account any lag where your money is waiting to be invested and is therefore not earning any interest, which is good to know. The actual lending rates before taking this into account are between 8% and 8.5%.
ArchOver is required by the FCA to produce an Outcomes Statement showing the actual interest rate paid compared to the target rate. You can view the latest outcome statement here. Overall it shows that ArchOver has tended to slightly outperform its target interest rate for Investment Plans launched since October 2018.
ArchOver Review – Is ArchOver A Good Investment?
Overall, ArchOver offers competitive interest rates and has a solid track record of successful lending.
According to its default history, ArchOver has only had 3 trading years out of 9 where it recorded defaults. These were in 2017, 2018 and 2020. In 2020 there were no actual losses recorded, which suggests that the defaulted loan amount was recovered.
In 2017 and 2018, total amounts in recovery were £5.81m and £0.97m respectively. However actual loan losses booked in these years were £500k and £450k respectively. This suggests that ArchOver has a competent recovery process for when borrowers default on loan payments.
Who is ArchOver for?
As with other P2P lenders, ArchOver would suit someone who is comfortable taking on higher levels of risk for higher rates of return. ArchOver’s lowest target rate of return is 7.4% on their auto-investment plan option, which comfortably beats returns on savings accounts.
But it’s important that as an investor you consider diversifying your investments. If you are going to invest in ArchOver loans, you should consider spreading your investment across multiple borrowers to reduce the risk of default.
You should also consider your overall investment portfolio, including any investments in shares, bonds, and savings accounts for example. It would be prudent to not put too much of your overall investment pot into any one form of investment, such as P2P lending.
Does ArchOver Offer An IFISA?
Yes, you can open an Innovative Finance ISA with ArchOver. This means you can make use of your annual tax-free ISA allowance by investing in P2P loans through ArchOver.
Once you open an IFISA with ArchOver, the account works the same way as a standard investment account and you have access to all of the same projects.
Is Archover Safe?
ArchOver is regulated by the Financials Conduct Authority (FCA) but is not part of the Financial Services Compensation Scheme (FSCS). This means your money is not protected by the regulator in the event that ArchOver was to cease trading.
However this is almost always the case with P2P lenders, as it is a higher risk form of investing. ArchOver has a strong record of high performing loans. It also looks to have a solid recovery process in the event that loans are defaulted on.
ArchOver also has a much larger and well established parent company which may provide you with extra comfort around its safety. Hampden also looks as though it has been happy to inject funding into ArchOver in the past.
ArchOver Reviews and Ratings
On TrustPilot, ArchOver has an overall rating of 4.5 (Excellent) based on 83 reviews. Filtering out reviews by borrowers, it still has a track record of 5 star reviews by many lenders.
Some reviewers mention the excellent communication and level of customer service at ArchOver. The only negative review relates to one of the defaulted loans from 2018 which presumably the reviewer lost money on.
Over on SmartMoneyPeople, ArchOver has a rating of 4.25, which is strong, but based on only 4 reviews.
Is P2P Lending Right For You?
It’s important to consider if P2P lending is right for you. Lending directly to small businesses is much riskier than other types of debt investments such as corporate or government bonds. So you need to be comfortable with the prospect of not recouping the initial investment you have made in case the borrower defaults and is unable to repay the loan.
P2P lenders such as ArchOver do have strict credit control and performance monitoring measures in place to mitigate risks as much as possible. They also usually have collections and recovery processes in place to try to recover any defaulted loans. Especially if the loan was secured against an asset.
Another factor to consider is the overall diversification of your investment pot. How much do you have invested in stocks and shares? How much in other types of lending or crowdfunding? A committed investor should ensure they are happy with the balance of their overall investment portfolio.
It’s worth bearing in mind that you usually cannot withdraw the money you have invested in P2P lending until the loan ends. This is true of investing in ArchOver’s loans. So you should consider how you feel about not having immediate access to your invested cash.
There are also certain moral factors you may want to consider. Do you feel comfortable about lending at relatively high interest rates to British businesses? There is an argument that if you choose not to invest your own money into P2P loans, other people or companies will anyway so you may as well take part. I’ve previously written about how most money in the modern economy is created with an interest claim on it.
Archover Review – Final Verdict
When I have the opportunity, I will seek to invest in ArchOver projects and I will update this ArchOver review when I do.
It is a P2P lending platform with a strong track record of successful lending, and solid returns. ArchOver also appears to have a good process in place to monitor loan performance, as well as a competent recovery team for if a loan is unable to be repaid.
Their platform is straightforward to navigate and you will get email alerts when new projects are going live. ArchOver also has a history of good customer reviews. It would be nice to see more detailed data on the prospective borrowers though.
I hope that you found this ArchOver review useful. Sign-up to Archover here to earn £75 cash if you invest £5k within 90 days of opening your account.
If you’d prefer not to sign up using the above offer, you can do so here.