Change is the one constant of the stories surrounding Covid-19 and its effect on our markets – small and medium-sized companies, and FinTech players in the alternative-finance sector. More on the problems of bounce-back loans soon.
57 per cent of the UK’s small- and medium-sized enterprises (SMEs) have adapted their business model in the wake of the Covid-19 pandemic, new research has found.
According to Nucleus Commercial Finance, more than a quarter (27 per cent) of SMEs said that their new, post-pandemic strategy has already delivered success, while a further 53 per cent said that they will make some of these changes permanent to help Srive their business forward.
Among the businesses surveyed by Nucleus Commercial Finance, 27 per cent said that they have shifted their teams to remote working, 19 per cent have pivoted to online services, and 13 per cent have started offering new products and services.
Almost three quarters (71 per cent) said that they have either already altered their business strategy, or plan to alter it soon. However, 29 per cent of SMEs said that they are focused on simply surviving the pandemic, rather than planning for the future.
“British businesses have always remained resilient in the face of adversity and this insight shows that Covid-19 is no exception,” said Chirag Shah, chief executive of Nucleus Commercial Finance.
“It’s encouraging to see that SMEs are adapting their approach to navigate uncertain times, which will stand them in good stead for what is likely to remain a challenging landscape for some time.”
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 2019/20 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.