The new year makes itself welcome with a little of what we know works and works well. Our strategy here at Money&Co. has been public for some time. We are interested in doing solid deals in the sectors that we know work well.
This means: first, property-backed loans, where lenders’ interests are protected by a charge on property; second, deals to finance other asset-critical ventures, such as music catalogues. The revolution in music streaming means that deals such as the recent sale of David Bowie’s back catalogue for $250 million will become more common. Third up is finance for litigation funding; this growth area is fast-expanding, and looks set to be a major line of business for Money&Co. in 2022.
We already have a property-backed deal waiting in the wings, and will bring more news of it when we can.
Meanwhile, here’s to a prosperous 2022 for us all.
Historical Performance And IFISA Process Guide
That figure is the result of over £24 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.