Today, we cast a look at Europe, where the early part of the economic recovery from Covid-19 is well under way. Our friends at P2P Finance News report on a healthy-looking real estate lending platform:
EstateGuru has reached the 50,000 investor milestone as it enters the final week of its crowdfunding campaign.
The European property peer-to-peer lender is already more than 200 per cent above its crowdfunding target on Seedrs and has reported a boom in investor registrations on its platform.
It said 12,952 new investors from 111 countries have joined EstateGuru since January 2020, taking it past 50,000.
The largest number of new investors joined from Germany – a market it only entered in March – making it the largest group overall at a total of 12,454, ahead of the Estonian community at 12,237 investors.
The platform has also paid out €15m (£13.4m) in interest payments.
“Now we can say that the deepest curve of the crisis is over for this time,” Marek Pärtel, co-founder of EstateGuru, said.
“Our investment volumes have almost reached the pre-crisis levels.
Historical Performance And IFISA Process Guide
That figure is the result of over £21 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.