Self-isolation and working from home come easily to the team at Money&Co. We have a small team and, thanks to a super-conservative approach to risk analysis, we have a business that functions well, despite difficult conditions in a Covid world.
Meanwhile, Monzo Bank finds large footprints come at a cost in times of crisis. Our friends at AltFi report:
Digital bank Monzo may see a nearly a 40 per cent drop in its valuation as it seeks its latest round of fundraising.
The latest suggested valuation places the fintech at about £1.25bn, a huge step down from its £2bn valuation it received in June last year following a £113m Series F raise.
Despite the drop in valuation, AltFi understands Monzo was able to attract both new and existing investors for the raise.
In early April it was confirmed that Monzo’s founder and CEO Tom Blomfield would be forgoing his salary for the next 12 months and top executives would take pay cuts to ensure that their staff still received their salaries.
Historical Performance And IFISA Process Guide
That figure is the result of over £23 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.