Cambridge, the western corridor along the M4 motorway and London have long been the major clusters of technology and FinTech companies in the UK can be found. That concentration is diluting outwards across the country, as our friends at Finextra report:
The UK’s fintech scene has become much less London-centric over the last couple of years, with the likes of Manchester, Cardiff and Glasgow developing into thriving hubs, according to a report from Findexable.
Now in its third year, the Mambu-powered Global Fintech Rankings algorithmically ranks cities and countries around the world according to the number and success of their fintech companies.
London retains the second spot out of 264 cities, behind San Francisco, but the index also shows a maturing sector around the UK, which saw three new cities enter the charts. There are now 13 UK cities with at least 10 fintech companies, with Manchester, Birmingham, Leeds, Bristol, Cambridge, Brighton, Oxford, Newcastle, Cardiff, Edinburgh, Belfast and Glasgow all on the index.
However, in many of these hubs, firms are still relatively small, with only London and Manchester home to the headquarters of billion dollar-plus unicorns.
The growth in previously underserved areas echoes a theme seen across the world: more than 50 new cities and 20 new countries joined the index for being home to at least ten fintech companies.
Our latest loan offering is a £500,000 two-year loan, rated A+ by our credit committee, with a fixed yield of eight per cent. It’s currently 33 per cent subscribed.
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.