Our friends at AltFi report on moves at Funding Circle, after a “third significant fall” in the share price of the UK’s biggest peer-to-peer (p2P) lender since its recent IPO. We have nothing to add to our comments on the IPO made before the offering became public.
“Peer-to-peer lender Funding Circle has announced the appointment of Goldman Sachs and Numis Securities as its joint corporate brokers. The news comes at the same time the company’s share price recovers from its third significant fall.
Funding Circle’s shares have been trading on the London Stock Exchange for seven weeks but currently its price sits lower than that of its launch. Before completing its IPO, the company narrowed its price range to 440-460 pence per share. The share price has seen high volatility since IPO, following a more than 20 per cent fall on its second day of trading to 340p. The broader market has also faced a decline since early October with the FTSE 250 having dropped nearly 10 per cent.”
All loans on the Money&Co site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (ISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income.
A Process Guide To Innovative Finance ISA Investment
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 2018/19 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.