As we’ve been saying – to the point of needless repetition – the cryptos are coming. One of the more interesting stories in a raft of news is reported by our friends at Finextra:
Change, a cryptocurrency investing platform for retail investors, has closed a €3.7 million crowdfund from 50 private investors at a €175 million valuation.
The round closed as Change hit twin milestones of 85,000 verified customers, a 190% increase from May 2020, and €850 million traded since its founding in 2016.
One of the few trading platforms which doesn’t charge fees on bitcoin trades, Change has a low minimum deposit of €10 and has built a user-friendly interface geared towards beginners.
The Estonian-based firm – which is backed by Roger Cook, former global CEO of DHL and Hans van der Noordaa, former CEO of the retail division of ING Bank and chairman of Deloitte – says it will use the funding to grow the team, further develop its platform and expand in European and Asian markets.
Our latest loan offering is a £500,000 two-year loan, rated A+ by our credit committee, with a fixed yield of eight per cent. It’s currently 23 per cent subscribed.
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.