The starting bell for the new tax year has hardly sounded, and the comparison sites are getting to grips with the crowdfunders offering peer-to-peer (P2P) loans in Innovative Finance Individual Savings Accounts (Innovative Finance ISAs, or IFISAs).
Some of the comparison sites have Money&Co. incorrectly described as offering only business loans. Well, we all make mistakes. Money&Co. offers business loans, secured against the assets of the borrowing company, and also property-backed loans. The current source of these property-backed loans is webuyanyhome.com. The effective loan-to-value of the offerings on our site so far is 64 per cent – which is a key reason why we have rated these loans as A+. There's currently one on offer – but you have to login or register to see it, as it's in the wider list of auction offers, sitting behind the Home page. There will be other streams of lending coming on site soon. Meanwhile, here's a reminder of the current state of play.
New Tax Year ISA Opportunity
The ISA allowance for 2017/18 is increased from last tax year to £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. To get that return, a pair of higher-rate tax payers would have to find a gross yield of well over 12 per cent.
But, in Nicola's own words: "As with any investment, there are risks involved. We always take security for our loans, but it is still possible to lose money. Some of our loans carry more risk than others and we give them ratings of A+, A, B+, B and C+ to reflect how risky we believe that an individual loan is. The new loans that are currently on the site are rated A+ or A reflecting the quality of the security that has been given by the borrowers."
If you haven't made a loan via Money&Co. before, please read the risk warnings and the FAQ section. You may also wish to consult a financial adviser before making an investment.