Tide, a Fintech providing banking services to small businesses, has issued a warning that the UK could be in store for a challenging business environment as one in five small business owners may not make it through the year.
According to a survey of 1000 small businesses, Tide revealed that approximately 70% of businesses had to increase hours, while a third relied on friends to keep them up and running. Rising prices are having a negative impact on businesses as they struggle to adjust.
Tide says that the West Midlands at 33.3% and the North East at 31.4% were the top regions where businesses were considering shutting but all areas are struggling
Tide reports that rising fuel and energy prices (57.2%) dominated worries for small businesses, with inflation (22.4%) second and supply chain issues (8.3%) third. Tide notes that currently the inflation rate is at 9.1% and the Bank of England has said it could go as high as 11% this year.
Additional points include:
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.
For more detail, login or register here.