The peer-to-peer (P2P) lending sector is looking to expand its share of SME funding, according to PWC research.
Money&Co. is a P2P lending platform that brings together individuals looking for a good return on capital together with carefully vetted small businesses seeking funds for growth. Our registered lenders have achieved average gross returns of more than 8 per cent in the five years we’ve been facilitating loans, now totalling more than £15 million.
PEER-TO-PEER and other alternative lenders could ‘disrupt’ more than a third of business lending by 2030, new research claims.
A new report from accountancy giant PwC, called ‘harnessing the power of disruption’, identifies key financial services areas open to – and already being impacted by – advances in technology, changes in demographics and customer behaviour.
In the UK small- and medium-sized enterprises (SME) sector, the report found that new digital entrants such as P2P lenders could dominate the market for underserved business borrowers, representing £4.1bn or 37 per cent of lending.
It warned that new entrants could face the pressure of regulatory scrutiny or a full economic cycle but said that this does not mean established brands can rest on their laurels.
The report suggested that financial services firms should keep a close eye on changes in appetite among their customers, highlighting the emergence of P2P lending as a “preferable option” for those not able to access lending through mainstream sources.
8% Yield Loans -Latest
As ever, we’ve made our best efforts in due diligence and credit analysis before awarding this loan an A rating. However, we cannot warrant that the representations of the borrower are true – though clearly we believe them to be so.
A Process Guide To Innovative Finance ISA Investment
Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). That figure is the result of almost £15 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 2019/20 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.