Recruiter reports that the ‘Brexit effect’ is kicking in, according to the Enterprise Investment Scheme Association (EISA), the trade body for the Enterprise Investment Scheme. The effect is not good…
Data from the Office of National Statistics (ONS) shows that, in volume terms, business investment was estimated to have fallen by 0.4% to £49.2bn between the first quarter of this year (January to March) and the second quarter (April to June). The asset that contributed most strongly to the decline was information and communication technology (ICT), alongside other machinery and equipment.
Speaking about the reasons behind the drop, director general of EISA Mark Brownridge said: “We believe this is the ‘Brexit effect’ kicking in. No business likes uncertainty, yet clearly businesses and investors are not sure what to do. They need extra support as they navigate these extraordinary times.
“We believe that the government’s messages on Brexit are actively scaring enterprise, by constantly offering a ‘worst case’ scenario. We would call for a more positive approach to give businesses the support, certainty and investment they so badly need.
“Capital investment is a key measure of economic health, and an indication of confidence in future growth, while business investment accounts for around 10% of overall yearly GDP.”
As we’ve consistently made clear, Money&Co. will continue to lend to carefully vetted small businesses with no other debt and a strong track record of profitability. See earlier stories here and here.
New Loans Latest
Project Rhapsody is now 30 per cent funded. The loan offer has an A risk rating, and provides a fixed-rate return of 8 per cent over five years.
Fuller detail is excerpted from the borrower’s offering on site below. The whole pitch – vetted according to our credit committee’s best efforts, though we cannot warrant the accuracy of the statements – is available to logged in users.
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.