We're pleased to announce a new loan on site – the latest tranche of a familiar business offering. The purpose of the loan is the acquisition of a financial services business. The offering is rated A, and offers a fixed-rate yield at 8 per cent. The process, for the moment, is more complicated than it might be – further down the page we offer a guide to getting through the procedural maze, and attaining a tax-free return when you invest via an Individual Savings Account (ISA).
The new loan offering on the Money&Co. site joins an offering from webuyanyhome.com. This is a three-year, property-backed loan, rated A+. It offers a fixed-rate yield of 8 per cent, gross. The yield on both loans will translate into 7 per cent, net of our fee. If you decide to lend the full £20,000 via an Innovative Finance ISA, you receive the income free of tax. See below for the process and the way the figures play out.
The ISA allowance for 2017/18 is £20,000 per person. If you do not have a Money&Co. ISA, please consider opening one. It takes a few minutes to fill in the application form online. If you hold loans in an ISA wrapper, you will receive the interest completely tax-free. Money&Co.'s registered lenders have achieved an average return of over 7 per cent (net of our one per cent fee) in over three and a half years. That translates into a tax-free income of over £1,400 per annum for those taking advantage of the full allowance.
A Process Guide To Innovative Finance ISA Investment
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 2018/19 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 an earlier article on security, access and yield.
It's relatively easy to logon to our site and register to become a lender. But if that's all too new-fangled, you can call us on 020 3143 4004 or write to Money&Co., 58 Glentham Road, London SW13 9JJ. We'll then send you an ISA Brochure, and ISA Transfer Authority form (if you want to transfer monies from a Cash ISA) and a Freepost envelope. Then it's just a question of following your nose to get that income...