European Equity Powers Ahead - Plus P2P 8% Yield Loan Latest
Let's take a quick trip back to the world of equity crowdfunding. We regularly cover equity investment – which carries risk that is generally higher than P2P risk (there's still a high failure rate amongst start-up companies). The upside is very different – and can be very attractive if the investee company takes off.We see equity investment as the other side of the investment fence from P2P (higher risk, capital upside versus less risk and a strong income stream with no capital upside). See some of the regular coverage, pointing out that equity vP2P is not a zero-sum, either/or investment decision, here and here.Our friends at Crowdfundinisder report the latest developments in the European equity crowdfunding market below.
Equity crowdfunding platform Startupxplore stakes a claim as being "Spain's largest online startup investors network." The statement is based on Startupxplore having 14,703 registered individual investors. The site was launched in 2016 and reports having funded ?6.5 million in 28 different deals. Startupxplore is regulated by Spain's National Securities Market Commission (CNMV). The company says that its funding success rate stands at 94%.Startupxplore states that it diversifies its portfolio by co-investing alongside Spanish accelerators, including Seedrocket, Lanzadera, as well as platforms like Plug&Play and Wayra.
New Loan Offer Latest
Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). That figure is the result of almost £15 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.
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 (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:
Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
Step 3: Buy loans in the loan market. Once you've put cash in your account it will sit there - and it won't earn interest until you've bought a piece of a loan. It's this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans - all loans on the Money&Co. site can be held in an IFISA - and your money will start earning tax-free interest.
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.