Our new loan offering is the chance to be an Angel – in the old-fashioned sense of someone who finances art (a play, a film, etc). But in sharp contradistinction to the old-fashioned Angel’s risk profile, this offering has been rated A+, our highest-grade risk profile. This is because of a combination of factors, including a personal guarantee supported by a charge over music rights. The loan yields a fixed rate of eight per cent and last five years. It is currently 20 per cent subscribed.
Purpose of loan
The primary purpose of the loan is to provide working capital to the artist so they can continue to collaborate to produce high quality music. Security is being provided in the form of a debenture and personal guarantee which encompasses music rights held (and the subsequent royalty income that will flow through). A clause will prevent sale of the music rights to a third party whilst the loan remains outstanding. The business has a strong track record of regular income from this source and the risk rating provided reflects this.
The band have released a number of successful singles, one of which, reached No.2 in the UK charts and was also inside the top 30 of the US billboard chart. They are a BRIT award nominee and also released a record that went Gold after selling over 500,000 copies. On an individual basis the artist is credited with a number of song writing and production credits working with the some of the worlds most well-known musicians.
Yes You Can, rated B, for £30,000 with an 11 per cent fixed yield, is currently 41 per cent subscribed. More loan offerings will land on site soon.
Historical Performance And IFISA Process Guide
That figure is the result of over £19 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.