More commentary for these disconcerting times. UKTech News carries a piece arguing that healthcare start-ups are set to blossom in the current environment.
Our view is that the Covid crisis is making most investors more risk-averse. That said, profit is made by brave investors, who commit capital when the roar of cannon can (metaphorically) be heard.
Healthtech is now the second biggest sub-set of the UK tech sector after fintech and there are more than 100 healthtech companies that are on track to become $1bn businesses.
The rapid switch to digital communication and tools across the sector, in the face of the crisis, is likely to have a profound impact on how quickly digital healthcare becomes part of the healthcare system in the next few years.
During 2019 the sector received $2.3bn in venture capital backing, almost double that of France, the next highest recipient. The companies in the sector have a combined turnover of £24 billion and employ more than 127,400 people across 3,860 businesses.
Historical Performance And IFISA Process Guide
That figure is the result of over £23 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.