Mainstream finance has spent a long time coming in the direction of altfi. Now the traffic is definitely two-way. AltFi reports an innovation from a Manchester-based lawyer, who’s heading for the banking space:
The founder of a Manchester-based law firm is gearing up for a rollout of a digital bank next year, after the law firm encountered problems dealing with traditional banks for its clients.
Called Frost, the fintech offers current accounts and has signed up more than 1,300 to its waitlist, ahead of a full launch early next year.
Frost is the brainchild of Pawel Oltuszyk, the founder of Optimal Solicitors and Edyta Sliwinska, head of marketing operations at Optimal Solicitors, based in Manchester.
As well as offering current amounts, where salaries can be paid in, direct debits set up, and purchases made, Frost also offers advice on switching energy providers and deals on foreign exchange.
The Frost debit card can be connected to Apple Pay or Google Pay.
Historical Performance And IFISA Process Guide
That figure is the result of over £21 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2019/20 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.