Following yesterday’s news of a Financial Conduct Authority (FCA) helpline for the peer-to-peer (P2P) sector, come reports that the FCA is concerned about the sectors lack of preparedness for a hard Brexit amongst SMEs.
Financial firms not prepared appropriately for a no-deal Brexit may risk an impact on their business, according to an update from the The Financial Conduct Authority (FCA).
Brexit will result in the loss of passporting for UK firms doing business in the EEA. Whether firms need regulatory permissions to continue to do business in an EEA country will depend on the activity they are carrying on, the local law and the approach of the local authorities in that jurisdiction.
With the 31 October deadline approaching fast the UK regulator has increased its efforts signposting – digital adverts – its Brexit advice.
The FCA is urging all firms to consider the implications of a no-deal exit and is particularly relevant for firms that:
Nausicaa Delfas, Executive Director of International at the Financial Conduct Authority said:
‘The FCA has undertaken significant work to prepare for the UK’s departure from the EU. We have published extensive information on our Brexit pages and held events, reaching firms and trade organisations around the country.
‘We expect firms to ensure they are ready if there is a no-deal. If firms haven’t finalised their preparations, there is a risk they could be impacted. Firms should consult the information on our website.
Woodville, rated A, for £200,000 with an 8 per cent fixed yield, is just closed. A new tranche will be landing on site soon. DK Tuning is a B+ loan of £280,000 with a five-year term and an indicative interest rate of 10 per cent. It’s 42 per cent filled at the time of writing.
The loan funds will be used for an acquisition. See below an excerpt of the borrower’s representations as it seeks funds. As ever, we’ve done due diligence, but cannot warrant the accuracy of the statements. For more detail. CLICK HERE.
The performance of DK Tuning has been strong, with turnover doubling every year so far. Gross margins are stable at around 50%, and crucially we have enough staff and resources already to absorb the target business. The combined turnover of DK Tuning and the target company will be over 1.1 million on day one, and we predict that this will rise steadily as our better customer service model and improved rate of sales per sub-dealer take effect. There should be a slight uplift in gross margins because of the integration benefits.
Historical Performance And IFISA Process Guide
That figure is the result of over £17 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.