Ernst & Young has just published its 2018 survey of young UK companies – over 59 per cent being under five years old. E&Y says that the companies surveyed “have significant ambition”. But funding remains a problem
The Fast Growth Tracker report says that 51 per cent of entrepreneurs say their biggest blocker to expansion is funding.
The E&Y survey collates data from 380 companies, and finds that 66 per cent are still looking for capital. More than four fifths (81 per cent) were seeking a minimum investment of £5 million and 19 per cent are seeking up to £10 million.
At Money&Co. we can probably help. We have funded scores of young businesses, with close to £15 million in loans facilitated so far.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (ISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income.
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 one of several earlier articles on security, access and yield.