Another day, another mainstream-FinTech partnership aimed at small- and medium-sized enterprise (SME) customers. Our friends at AltFi report the latest:
Business banking provider Tide has joined forces with SME accounting firm Crunch in its latest partnership.
The new collaboration will allow Crunch users to easily set up a business banking account with Tide and enhance the two firms’ financial data sharing.
“At a time when the self-employed and small business owners are facing huge challenges, it’s important that service providers such as Tide and Crunch come together to provide as much support as we possibly can.”
By using open banking, all transactions made with a Tide account will be automatically imported into the Crunch software, making it much easier for small businesses to keep on top of their finances.
Historical Performance And IFISA Process Guide
That figure is the result of over £20 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 2020/21 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.