The latest ingress by the mainstream into alternative finance involves Money&Co.’s close neighbours in Hammersmith, Lanistar. Lanistar’s latest funding round is a hefty £15 million. FinExtra reports:
Lanistar, a personal financial management startup founded in 2019, has raised £15 million to support its forthcoming commercial launch in Winter 2020.
The investment, from Milaya Capital, gives the VC a 10% stake in the company at a valuation of £150 million.
Lanistar plans to use the fresh capital to grow its operational and customer support teams, and scale towards its product launch. The Hammersmith-based company employs 45 full time staff, and has plans to grow a 150-person support team in Greece. It has also recently announced partnerships with organisations such as Mastercard and Jumio.
Having already secured £2 million in seed money, Lanistar is creating a new debit card that links to up to eight bank cards to help customers better manage their finances via new technology and open banking.
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.