Following some inaccurate reporting in mainstream media this week end, Peer 2 Peer Finance News runs an article that betrays an understanding of how P2P financial technology businesses and start-ups like Money&Co. actually work.
The P2PFN article points out that the inaccurate report focused on “small company accounts filed by Denmark Square Limited – one of the parent companies of Money&Co – which runs the platform in a joint venture with Bramdean Asset Management…
[Money&Co. CEO Nicola Horlick] said the platform has been trading at breakeven in the current financial year and said it may make a profit for the year to end March 2019.
“We are forecasting a substantial profit in the year to March 2020,” she said.
Horlick added that there are currently 15 people working full-time on Money&Co products either through Denmark Square Limited, Bramdean Asset Management LLP or through the distribution joint venture and there are two part-time.
“Some mainstream media has betrayed a woeful lack of understanding not just of financial technology, but of the way that start-ups in general actually work,” a spokesman for the platform added.
“It’s pointless to speculate as to why there’s such a consistent desire in some quarters to dress up good news as bad.”
A Process Guide To Innovative Finance ISA Investment
All loans on 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. 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.