Many commentators, including ourselves, have predicted shake-out in the platform lending sector. Economies of scale, mergers, new lending streams and, in some cases, moves towards banking all look likely to us.
ThinCats has told its customers that it is shutting down its ‘VIP forum’ with immediate effect and will close the accounts of all registered investors who do not hold assets on the platform by the end of the month.
Peer2Peer Finance News understands that the ‘VIP forum’ was set up in the early days of ThinCats and is a secondary forum, separate to the main forum, where registered members could discuss specific loans.
The ‘VIP forum’ had been experiencing IT issues since Friday evening, preventing members from being able to access the forum.
“We have been liaising with the platform that hosts the VIP forum and have been advised that there is a malicious code on the website, which is preventing access,” ThinCats said in an email to its customers.
“In order to restore access, this would take significant time, resources and costs. As such we have concluded that it would not be commercially beneficial to undertake this work and therefore we will be closing the VIP forum with immediate effect.”
The main forum remains accessible to all registered investors, ThinCats said.
Yes You Can, rated B, for £30,000 with an 11 per cent fixed yield, is currently 22 per cent subscribed. More loan offerings will land on site soon.
Historical Performance And IFISA Process Guide
That figure is the result of over £19 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.