As corporate and commercial solicitors, our clients often ask us about the various different funding options available to them.
Experience shows that some banks appear to be reticent about lending large sums even to strong and profitable businesses on a conventional basis owing to the level of risk involved, however, without these loans, such businesses continue to find it difficult to execute growth and development plans.
ArchOver, whose CEO is Angus Dent, a long time CWJ client, has launched a new crowdlending platform which could help kick-start plans for businesses for years to come. High calibre businesses tend to have reliable clients and ArchOver’s model leverages the value of those relationships by allowing a business to borrow against its accounts receivable (AR), as long as the business has credit insurance and it allows ArchOver to have the first charge on the AR.
This form of lending requires no personal guarantees from directors, no on-going charges and drawdown can be completed within ten days of the business being on the platform. The facility comes at an interest of 12% per annum on sums advanced.
Former England Rugby International, Jeremy Janion supplies some of the leading names in the construction industry via his company Ventalution Ltd. Business was booming and Jeremy wanted to fund the growth of Ventalution so he turned to ArchOver. Ventalution was granted a loan against 80% of his AR.
Ventalution’s sales figures had trebled over a 12 month period and the company needed a cash injection to fund its debtor book, which had rocketed from £375,000 to nearly £900,000. Ventalution turned to ArchOver once again for an additional £250,000 working capital which enabled it to meet the mass of new orders.
This form of lending benefits both sides of the transaction. Small and medium sized businesses are supported by crowdlending platforms such as ArchOver, giving them the help that they need to grow but it is also safer for the investor, because it is lending against insured debts and the insurance should cover any complications along the way.
This method of lending is now being introduced to the professional business services market. Crowdlending platforms can assist these firms by freeing up capital and raising finance for any legitimate business purpose, especially for succession planning; helping to make businesses plans for development and growth a reality.
