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Post by moneyman on Jul 22, 2017 8:30:29 GMT
The ArchOver 'Risk Warning' states that interest may not be paid and all capital may be lost. The security of 'Secured and Insured' loans is provided by "an all-asset charge over the Borrower’s business", all borrower revenues flow through "Daily Transition Accounts’ owned by ArchOver" and 'Accounts Receivable' are insured. If customers fail to pay, the insurance kicks in. If the borrower fails to maintain 'Value to Loan', ArchOver is able to sell the assets. For lenders to incur a loss it would seem necessary for customers to fail to pay and for the insurance company to go bust, and for the assets to be worth less than the loan.
Apart from Armageddon, or fraud having not been picked up during the initial and continuing due diligence, under what scenarios would lenders lose out?
If ArchOver is all about secure lending, why does it offer borrowers the less secure 'Secured and Assigned' option?
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Steerpike
Member of DD Central
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Post by Steerpike on Jul 22, 2017 8:36:34 GMT
I think that S&A loans have higher rates for lenders, perhaps because of reduced overheads.
As far as I know the insurance has not been tested on this platform and so there is still room for doubt particularly given the skills that insurance companies deploy to avoid paying out.
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Post by moneyman on Jul 25, 2017 7:47:27 GMT
It would be interesting to hear from an ArchOver rep on this topic.
Any takers?
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Post by hugoarchover on Sept 19, 2017 15:12:30 GMT
I think that S&A loans have higher rates for lenders, perhaps because of reduced overheads. As far as I know the insurance has not been tested on this platform and so there is still room for doubt particularly given the skills that insurance companies deploy to avoid paying out. Steerpike Credit insurance has been tested however if the collected amount does not affect the value to loan (125% min) then the funds are returned to the borrowing company. Should the value to loan drop below the minimum required then the loan would be reduced to bring the loan to value back up to 125%.
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Mick
Be nice... People respond.
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Post by Mick on Apr 27, 2018 9:04:48 GMT
Looks like the insurance may be tested in real world conditions Re...6316 / 6317. Or perhaps enough money exists in the invoices. Arch have covered April & May's Payments ...That's a very principled start.
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