Here’s another consequence in the current surge in the Bitcoin price, which has traded as high as $60,000 in recent days. We’re not making any investment comment, other than to say as purely personal observation, that despite hearing the many gung-ho radio adverts to attract punters, this isn’t an IPO the writer of this News item will be investing in.
The Israeli fintech announced it would go public at a valuation of $10.4bn after merging with FinTech Acquisition Corp. V (FinTech V), a publically-traded SPAC run by American businesswoman Betsy Cohen.
A SPAC (special-purpose acquisition company) is a way for companies to go public without going through all the hassle and expense of an IPO (initial public offering).
Cohen founded Bancorp, a bank holding company based in Minneapolis, in 1999 and subsequently FinTech V, which raised $250m when it listed on the NASDAQ in December 2020.
As part of the deal, eToro will receive $250m raised in FinTech V’s IPO as well as $650m from a group of individual investors, including the likes of Fidelity, Softbank Vision Fund 2 and Third Point LLC, which has invested in the likes of Square, Alibaba and Facebook.
Latest Loan Offer
The latest loan offer on site has an A-rating and an annual rate of interest of 7 per cent. The term of the loan is 12 months. The offer, just launched, is now 33 per cent filled.
Historical Performance And IFISA Process Guide
That figure is the result of over £20 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 2020/21 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.