ArchOver’s Market For Buying And Selling Loans

P2P lending website ArchOver*, which does secured and insured business loans, has just launched its secondary market, so that you can now buy and sell existing loans.

However, it is highly unusual and so it requires explaining.

Two key facts

Before I waste your time, however, you should note that the secondary market is only available to people who can self-certify that they are high-net worth or sophisticated investors, under the usual definitions set down by the financial regulator.

Also, the minimum sized loan part you can buy or sell is £5,000.

How – and where – to use ArchOver's secondary market

Normally you log into a P2P lending website itself in order to see its secondary market, and to buy or sell loan parts there.

With ArchOver, you go to a completely different website: Asset Match.

Asset Match was created to be a place to buy and sell shares in private companies, but it has just expanded into loans with ArchOver. Perhaps it will start offering loans from other P2P lending websites that don't have their own in-house secondary markets.

You can agree to buy loan parts on offer or, if you don't like any offers, you can offer to buy at a price you specify and this might attract a seller.

If you're wondering what I mean by “price”, you don't necessarily buy or sell £5,000 of loans for £5,000. It could be more or less. Read more on that in Trading Loan Parts At A Profit Or Loss.

The market is currently small

Currently, just one ArchOver loan is listed but Asset Match “anticipates” more.

ArchOver CEO Angus Dent told me (in an article comment below) that lenders who want to sell loan parts in loans that are not currently listed on Asset Match can get in touch with ArchOver to arrange it.

Costs

It costs 1% to buy a loan part through Asset Match as well as 1% to sell it. These are at the upper end for a P2P lending secondary market, which are usually 0% for buying and 0.25% to 1% for selling. (You can see how the secondary markets compare in Where Can You Buy Or Sell Existing Loans?

Independent opinion: 4thWay will help you to identify your options and narrow down your choices. We suggest what you could do, but we won't tell you what to do or where to lend; the decision is yours. We are responsible for the accuracy and quality of the information we provide, but not for any decision you make based on it. The material is for general information and education purposes only.

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