Doing Business In The Time Of Covid-19 – New Loans Latest

Hello. Today, we are very happy to let our friends at P2P Finance News report the latest for us.

Money&Co has completed another £1m of litigation finance, as well as a £400,000 loan for music publishing company Bsides Music.

The litigation finance is intended for tenants to take action against landlords, or homeowners of new builds against their insurance companies, for household disrepair. The platform lends money for surveyor reports to confirm that there are major issues and claims are viable.

Meanwhile, the music loan, which was a five-year facility and offered an eight per cent yield and A plus security, was for Bsides Music to purchase a catalogue of music rights from a songwriter who specialises in Christian music, costing £538,000 including deal costs. The company put forward £138,000 in cash and Money&Co has made up the balance by raising and providing a £400,000 loan.

The platform said that it is now working on another music loan for £2.2m and is looking for other music loans.

“We did a music loan and litigation finance and neither were affected by Covid-19 because irrespective of the economy and what’s going on, people are still buying music rights and there’s still a need for finance for house disrepairs,” said Nicola Horlick (pictured), chief executive of Money&Co.

“There’s more downloads and streaming during the lockdown. A lot of people at work can’t listen to music whereas at home they can have music in the background whilst working so some music streaming services have benefited during the lockdown.

“Similarly, people are watching video streaming services like Netflix more and music is included in film and TV so that’s a further effect.

“Music is a safe investment and a good way of making money during a recession. It’s uncorrelated with the stock market and being able to put a music loan into an Innovative Finance ISA and use the tax-free wrapper, is another benefit.”

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 £20 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 facilitated over £23 million – with 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.