Lanistar, a new fintech start-up with big ambitions and some controversy, has been approved by the Financial Conduct Authority to provide payments services.
The news follows a series of events last year when Lanistar announced its intentions to be the next fintech unicorn (although this has recently been upgraded to a ‘deca-corn’) through an attention-grabbing social media campaign. Not long after, the FCA put out a statement warning that it may be a scam only to row back a few days later and remove the warning.
Modulr was flagged by Lanistar as a key partner at the time of the FCA rebuke in November 2020 but soon clarified that it was early days: “Lanistar has not completed our due diligence process, so it does not have any right to refer to Modulr or suggest that it has the right to provide regulatory services on behalf of Modulr,” it said at the time.
Notification of Lanistar’s latest FCA approval, allowing the handling of e-money and provision of certain payment services on behalf of an e-money institution meaning Lanistar can offer its customers digital accounts to send and receive payments, shows it has been operating with the new license for the past three weeks.
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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.