Regular visitors to our News section will be up to speed with our reports on the convergence between mainstream finance and the alternative-finance sector. Acquisition by mainstream players is currently the dominant theme here. The latest news comes from consumer-focused alternative lending platform Lending Works, which has been acquired by asset manager Intriva Capital.
The deal sees Intriva take full control of Lending Works, subject to regulatory approval. The firm says it has further committed to providing “significant additional funding and capital” to support the growth of the business. This will allow expansion of the business in the coming years.
Nicholas Harding, founder and chief executive officer of Lending Works, will continue to lead the business, alongside the existing management team. The intention is for some of Intriva’s team, including Simon Finn, Intriva Capital’s Managing Partner, to join Lending Works’ board as non-executive directors.
Historical Performance And IFISA Process Guide
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.
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.