The autumn term is upon us. Along with winter, the longer-term effects of the Covid-19 virus will create a chill climate of its own. This autumn will see a series of consolidations, as business models focus on proven niche markets, and assets get snapped up at bargain prices.
Here are a couple of examples of what we can expect to see.
London-based banking platform provider Railsbank has agreed to purchase the technology and assets of Wirecard Card Solution, the UK arm of Germany’s Wirecard, for an undisclosed amount.
“The deal, first reported in mid-August, was confirmed on Friday evening and will include “the transfer of client relationships” from Wirecard to Railsbank.
Just last week Railsbank confirmed it had won the Asia-Pacific business of former Wirecard customer Wirex, indicating that the London firm was looking to aggressively scoop up the fallen company’s customers.
American personal finance outfit NerdWallet is eyeing international expansion after acquiring UK-based comparison site Know Your Money. Financial terms were not disclosed.
Know Your Money has a 15-year history in the UK price comparison market, helping Brits find the best deals on things like loans, business bank accounts and mortgages.
NerdWallet says that the pandemic has increased the number of people turning online to access financial information and services, making it an ideal time to strike.
Know Your Money will become a NerdWallet subsidiary and all executives and employees will be staying on.
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.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.