Alternative Finance Sector Gears Up For No-Deal Brexit – Plus Loan Latest

With today’s entirely unsurprising news that a Brexit deal is “essentially impossible” – we were never stupid enough to believe that no deal was a million-to-one shot – we look at preparations on either side of the Irish border.

Our own position is clear: we’ll continue to lend to carefully vetted companies with a good profit record, no debt other than the security charge we take on their assets, and a clear path to repaying the interest and redeeming capital at the end of the loan. We’ll match these companies with individual lenders looking for a good return on their capital.

In Ireland, a new line of “Brexit finance” has just been launched. It’s sad that such credit lines should be needed. Our friends at AltFi report:

Linked Finance, Ireland’s largest peer-to-peer lending platform, has launched a new loan category for Irish SMEs who are in the process of preparing for Brexit.  

Niall Dorrian, CEO of Linked Finance, says many of the businesses the firm lends to are putting additional working capital in place and this new loan will help better manage cash through the Brexit process’ uncertainty.

“The logic being that it’s easier to access credit today before any Brexit-related challenges have taken their toll on cash flow. With the UK political situation changing day by day Irish businesses will continue to hope for the best, but would be prudent to prepare for the worst,” he said.

The new 18-month loan offering allows Irish SMEs to access working capital facilities of up to €300,000. Linked Finance says funding can be accessed within 24 hours. These new loans allow Irish SMEs to spread large annually recurring costs over a longer repayment period than the typical 11 or 12-month facilities usually on offer for things like insurance premiums, stocking loans or professional subscriptions.

New Loans Latest

  • The second tranche offered by Yes You Can is a B-rated offering, over of five-year term, with a fixed rate yield of 11 per cent gross. is on site  It’s seven per cent filed at the time of writing.

The whole pitch – vetted according to our credit committee’s best efforts, though we cannot warrant the accuracy of the statements – is available to logged in users.

  • Project Rhapsody s A-rated, with a five-year term and a fixed-rate gross yield of eight per cent. It’s 25 per cent funded at the time of writing. More detail can be found here. 

Historical Performance And IFISA Process Guide

  • 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 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.

  • Money&Co. has been lending for over 5 years and has only had one bad debt so far, representing a bad debt rate of 0.03 per cent per annum.

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:

  • Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
  • Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
  • Step 3: Buy loans in the loan market. Once you’ve put cash in your account it will sit there – and it won’t earn interest until you’ve bought a piece of a loan. It’s this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans – all loans on the Money&Co. site can be held in an IFISA – and your money will start earning tax-free interest.

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.


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Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.