There’s good news about what promises to be a very string new financial year ahead. We were recently called for an update by leading trade publication, P2P Finance News. The report is set out below.
Money&Co. made a loss of approximately £200,000 in the year ending 31 March 2021, but the platform’s chief executive Nicola Horlick expects the company to be profitable by 31 March 2022.
Despite the 2020/21 loss, Horlick told Peer2Peer Finance News that she regards it as “an excellent result”, pointing out that very few fintech companies actually make a profit, and stating that the company has done “exceptionally well during the pandemic by sticking to its core areas of lending (litigation finance and music)”.
She revealed that Money&Co has been profitable every quarter so far during the current financial year, and therefore expects the company to be profitable in the year ending 31 March 2022.
“We expect 2022/23 to be a big year for Money&Co. with a substantial expansion of the lending book,” she added.
According to documents published on Companies House, the company had net assets of £777,767 by 31 March 2021 – up from £73,448 at 31 March 2020.
Core earnings were -£9.885m, compared with -£9.607m the previous year.
Prior to the start of the Covid-19 pandemic, Horlick decided to purely offer secured loans, with a focus on music loans and litigation finance. She said that this was due to concerns of a Brexit-induced economic downturn.
The lender is seeking to fund claims for financial mis-selling. The term of the loan is 15 months.
HTLH was recently incorporated to fund pension mis-selling and irresponsible lending claims. The loan is currently 48 per cent funded.
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.