We’re pleased to report two new loans are available on site. Demand is high, and they’re filling fast.
Mar-key Marquees Limited first borrowed money from our lenders in 2014 and has had an exceptional payment history. The company manufactures and rents out large marquee structures for events like the America’s Cup. The stock held by the company is of a high value as the posts for the structures are made of aluminium. The original loans made to the company were amortising and so they will soon be fully repaid. The company would now like to borrow a further £200,000 to finance the purchase of addition materials to create more stock in order to meet demand from new customers. The loan is rated A and the term is only 8 months. The interest rate on an annualised basis is 7 per cent. The loan is 69 per cent filled at the time of writing.
The second company looking to borrow is DK Tuning Ltd. The company specialises in motor vehicle remapping. Every modern vehicle has a computer chip holding information that determines its set-up. A remap is when the file held on the chip is modified to improve the performance of the vehicle or the fuel efficiency or both. The business started four years ago and is growing rapidly. A 5-year loan of £280,000 is needed to supplement working capital. The loan is rated B+ and the interest rate is 10 per cent. The loan is 6 per cent filled at the time of writing.
Historical Performance 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.