Market Moves In Quoted FinTech Sector – Plus Loan Latest
Regular readers will be aware that we monitor the progress – or otherwise – of major players in our own direct-lending sub-sector of FinTech. We offer the following extended excerpt of a news report from our friends at AltFi without further comment.
Samir Desai, CEO and founder of listed lender Funding Circle, has purchased over 163,000 shares in the company following the company’s recent results, according to an update posted on the London Stock Exchange (LSE). AltFi reports:
“Desai splashed the cash and spent over £101,000 to buy the stock in his own company on the same day that Funding Circle’s results were published, the share price having dropped to its lowest point in over three months.
The shares were purchased by Desai last Thursday for around £0.62 per share but have since leapt to £0.77 per share, an increase of 10 per cent.
Despite seeming like a fairly sizeable transaction, the CEO only increased his position by 1.1 per cent in total.
Funding Circle declined to comment but a spokesperson confirmed that the share purchase was Desai’s first since Funding Circle’s IPO in 2018.
In the first half of this year, Funding Circle saw its losses increase to £113.5m, a jump of over 300 per cent compared to the same period last year.
Despite this, the fintech says it has approved more than £2 billion of loans in the first six months of the year in the UK and US and is the 5th largest CBILS lender with c.20 per cent market share of loans approved.
Loan Latest
- Our latest loan offering, the property-backed offering from WeBuyAnyHome.com, has attracted 32 per cent of the £150,000 it is seeking. The loan is rated A+ by our credit committee, and yields 8 per cent over a three-year term. For more detail, login.
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 only had two bad debts 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.