Another one bites the dust - #6261 V********** (AO)

I have a feeling I may be in this one - can someone PM me?

I commented in my post here about how many loans on Archover seem to be to the same company re-financing previous loans p2pindependentforum.com/post/200552

I think this is the 2nd one now that has gone 'pop' recently, which considering the low deal flow here, maybe a fairly high percentage in real terms.

I think a lesson here is to go to the first loan only. and stay out of any further offerings.

I'm not in it (phew!), I still have the e-mail from Archover when they came for more late September last year, and didn't like the look of it.

They've gone into Administration just over 3 months after taking another 300k...

It will be interesting if the 'Insured' aspect of this works in practice.

If it doesn't then it's the end of Archover's business model.

Yes, I assume that the 125% is a trigger condition or threshold. The receivables are paid via an Archover account, so, as I understand it, if they are on the ball, they could stop onward payment to the borrower and use the incoming moneys to help in recovering the debt.

It is important to stress the following - all loans must go through due diligence and pass the credit committee. The security must be in place for the loan to be drawn down / refinanced. We monitor every loan facilitated to every business every month and we conduct a site visit every six months. That was still the case when we funded the latest loans. Unfortunately, things change and problems do occur.



We have been working closely with their management team for last few months. Even though they are not technically in breach of their loan covenants the financial position (cash flow) of the company caused our monitoring team concern. We are awaiting a full report from the administrator before commenting on the exact status of the recovery.

In regards to the Secured and Insured loan it is secured against the Accounts Receivables (the debts) owed to the company. At the time of appointing the Administrator there was enough book debts to pay the capital back for S&I lenders.



One of the primary jobs of the Administrator is to collect this debt. As we hold a first charge over the company all money collected will be returned to ArchOver to pass onto Lenders in proportionate amounts.



Having said that, in the construction industry, debt is notoriously hard to collect quickly. Often there are counter claims, disputes raised, clauses in contracts etc that can seriously delay things. It’s the Administrators job to try and tackle these as well.
Where the debtors can’t pay for financial reasons or they delay payment, the Insurance kicks in and pays out. If we still have a debtor who won’t pay, and there is no contractual reason why they shouldn’t, we will appoint a partner of ours, Escalate, to pursue via the courts.

Sorry Hugo, but what you have said just does not cut it.  Let's look at the facts.  In July the loan proposal said they would make nearly 800k in 2017 and net assets would be over 2M.  Moving forward to the October proposal the forecast for 2017 is a profit of just under 500k and net assets of only 320k, down nearly 1.7M from what was forecast only 2 months earlier.  My fault for not looking in more detail at the trading performance and how it had worsened from the previous proposal.  But, maybe naively, I would have expected Archover to have covered this as part of DD, and flagged this up to potential investors for the October loan.  There is no mention in the October proposal that trading has materially worsened from the picture presented two months earlier.  Lesson learnt by me, and I will be more careful in future.  My confidence in Archover has been severely dented and I also feel stupid I didn't pick up on the obvious.  Wont make the same mistake again