In, out, in, out, etc. The topic of SME financing – how easy it is to find from non-banking sources, rates of uptake and the like – is the subject of regular surveys producing more or less contradictory assessments. Here’s an earlier piece we published here in News pointing out the flip-flop nature of the published research.
ALMOST a third of UK small- and medium-sized enterprises (SMEs) have found it harder to access finance over the past 12 months, new research has found.
Purbeck Insurance Services commissioned a Censuswide Survey of 500 owners and directors of UK SMEs.
56 per cent said the ability to access finance had stayed the same over the past year, while just 14 per cent said it had become easier.
Meanwhile, business conditions appear to be worsening for SMEs.
Two thirds of respondents said they had increasing uncertainty about the economy, while 59 per cent said exchange rate volatility had made their business harder.
Loan Latest And IFISA Process Guide
That figure is the result of over £17 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.