As promised yesterday, here’s some research from independent analyst, Beauhurst, on equity crowdfunding. The upshot, as reported, is that the growth on the other side of the fence is slowing.
A report released this week indicates a decline in both the number of deals and the total amount deals for the UK early stage equity market. Beauhurst has published their annual recap of total investment for 2018. The Deal quantifies the UK entrepreneurial ecosystem stating that “2018 was a strong year but not strong enough,” following a blowout year in 2017.
Granted, 2018 registers about the same number of deals as 2016 and 2015 and significantly more in money invested, but the authors wonder aloud if Brexit fears are throttling investment. The news is not really that bad and the authors admit that 2018 could be nothing more than a correction from “dizzying heights.”
So how does 2018 compare versus 2017?
The latest tranche of property-backed loan on offer is now 86 per cent funded and will be closing shortly. The loan offer has received an A-rating from Money&Co.’s credit team. The loan offers a fixed-rate gross yield of 8 per cent, and has a duration of five years.
A Process Guide To Innovative Finance ISA Investment
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 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.