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To Be – Or NFT? Two Different Views – Plus Loan Offer Latest

What’s in a name? Well, when the name is Non-Fungible Token (NFT), it would seem there’s quite a lot.  NFTs are the subject of much hype and controversy – see our rather damning conclusions on NFTs in a blog from last year.

So here’s the latest – two very different views from the same edition of the news site run by our friends at Altfi.

As the NFT space shows no signs of cooling down anytime soon, Estonian firm NFTPort has raised $26m in a Series A funding round.

The company offers an infrastructure platform aimed at NFT developers, which it claims is used by 30,000 developer teams including companies such as Nifty Gateway and Protocol Labs.

NFTs were recently found to be the most popular category for blockchain start-ups, with $2.4bn raised in the first three months of 2022, representing more than a quarter (26 per cent) of total blockchain funding according to research from CB Insights.

Famed Microsoft founder Bill Gates has dismissed NFTs, claiming the digital asset class is “100 percent based on greater fool theory”.

The greater fool theory suggests that you can often make money by purchasing overvalued assets, as those assets can later be resold at a greater price if there is a “greater fool” available.

If no “fool” is available, these assets will eventually tank in value according to the theory.

Gates said he would rather invest in physical assets like farms and factories, or in “a company where they make products”, he told an audience at a physical event hosted by TechCrunch.

Loan Offer Latest

A loan offer from Harris & Co., a borrower that operates in the litigation claim sector, is available on site. The loan is risk-rated A by our credit committee. It has a gross yield of eight per cent, for a fixed term of 12 months. The loan offer is currently 13 per cent subscribed, and will close when filled.

For more detail, login or register here.

Historical Performance And IFISA Process Guide

  • Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). 

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.

  • Money&Co. has been lending for over 7 years and has only had two bad debts so far, representing a bad debt rate of 0.03 per cent per annum.

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:

  • Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
  • Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
  • Step 3: Buy loans in the loan market. Once you’ve put cash in your account it will sit there – and it won’t earn interest until you’ve bought a piece of a loan. It’s this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans – all loans on the Money&Co. site can be held in an IFISA – and your money will start earning tax-free interest.

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.

 

 

 



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Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.