Building a P2P legacy from the ground up: ArchOver

Angus Dent on the growth of his P2P lending firm, ArchOver three years since its launch.

Angus Dent has been on both sides of the start-up world. As the CFO at OneClick HR, and CEO at Synchronica, he was involved in growing and selling those companies on. That’s when he realised how difficult it is for mid-sized companies to access funding after the crash, when the banks became too risk averse to take on growth businesses.

Not long after, Dent launched ArchOver in July 2014, to provide secured peer-to-peer lending facilities for SMEs. ArchOver has now secured over £39 million with an average return of 7.31 per cent for investors, and 20 employees on its roll, and has secured ongoing funding from Hampden Group, one of the largest financial support service firms in the world. From starting a P2P lending business from the ground up to securing approvals from the Financial Conduct Authority, Dent speaks to GrowthBusiness about his experience growing ArchOver.

What does your business do?

P2P business lending. In the same way that technology advanced the likes of day-to-day banking, news, retail, travel and healthcare, we believe P2P-led technology can change business borrowing for the better. We are aiming to help British industry by making access to funding as easy and as simple as possible by working with businesses.
At the same time, we are helping maximise returns for investors at every stage of their life by providing lenders with a return that’s higher than  expected given the level of security built into our services.

Where did the idea for your business come from?

It came from our own business experience – we knew SMEs were finding it difficult to borrow funds to meet their working capital needs and to grow. The banks weren’t providing a good enough service, and we knew that business finance could be done better with a crowdfunding model, so we decided to do it ourselves.

How did you know there was a market for it?

The businesses I’d run had always found it difficult to borrow money and discussion with other business owners and managers suggested it was the same for them. There was a lot of desire out there for a broader range of funding options – the business leaders I spoke to wanted to be able to branch out beyond the traditional banking avenue.

How did you raise funding, and why?

There were two of us at the beginning and initially the business was funded with our own money, and that was supplemented by investment from family and friends. Once the business was off the ground, we secured funding from the Hampden Group, the 40 year old insurance and financial support services group. They saw an opportunity in us to add a new service to their portfolio, and they now provide growth funding and also invest over our platform on the same terms as our other investors.

Describe your business model in brief.

At the heart of our business, is providing a personal service – we like to see the whites of our borrowers’ eyes. Doing regular on-site visits means we get to know them in real depth – we understand their strengths and challenges, and we can advise them if things get difficult. Working face-to-face makes us better able to assess the situation and help borrowers reach their growth goals, as well as protecting our lenders’ investment.
We have two lending models. The first, Secured and Insured, is a loan secured against a company’s accounts receivable, so the money owed for goods and services a business delivers to its customers. The second, Secured and Assigned, is a loan secured on contracted recurring revenues – so here we are talking guaranteed revenues of profitable and established businesses.

Your lowest point was…

When an early supporter had a change of management and dropped us.

Your highest point was…

Every day is a new high. That’s the benefit of being a small challenger brand – we’re agile and no two days are the same. We’re not set in our ways, we can change and move when we need to, and that makes our everyday work challenging and exciting.

What advice would you give to other entrepreneurs?

Follow your instincts. If you believe there’s a market out there for what you do, chances are you’re right. But do your research carefully – somebody else could already be doing it and you just don’t know it.
Also, don’t listen to the vested interest of those providing something similar when they tell you your product or service isn’t what customers want. Look for where they fall short and fill that gap.

Where do you want to be in five years’ time?

I’d very happily be doing more of what I’m doing now. I’d like ArchOver to be a bigger company writing more business with more people. It’s our ambition to facilitate £500 million worth of lending by 2022. If we can achieve that we’ll have helped a good number of people along the way – so people investing for every stage of life, business owners aiming to take their enterprises forward and create a prosperous future for themselves and their employees.

If you weren’t an entrepreneur, you would be…

I’d like to be a mechanical engineer, but my maths was never up to it.

If you could go back in time, would you do anything differently?

Of course. But you can’t, so why even consider it? It’s much better to focus on the future than the past.

What is your philosophy on business or life?

I only eat nuts de-hulled, which perhaps means you should do the obvious things to make business and life easier.

https://staging.growthbusiness.co.uk/investors-want-company-2550653/

Praseeda Nair

Praseeda Nair

Praseeda was Editor for GrowthBusiness.co.uk from 2016 to 2018.