We’re pleased to announce the launch of two new loan offers on site, with yields of 9 and 8 per cent.
Below is detail from one borrower’s representations – a UK company investing in German property. As ever, we’ve made our best efforts to ensure that these representations are true, but cannot warrant that this is so. For fuller detail, login or register.
Our company is a substantial property development business and we have been trading for 9 years. We focus on purchasing and developing listed properties for residential use in leading cities in Germany including Berlin, Frankfurt, Hannover and Leipzig.
The shortage of residential property in Germany means that there is an opportunity to increase our level of development activity and that is why we are seeking to borrow through Money&Co.
We have completed over 50 projects in the past 9 years with a total value in excess of 1.5 billion euros. Germany has been the top performing EU economy over most time periods and it showed particular resilience in weathering the European debt crisis. As a result, it has had a stable housing market. Latterly, Germany has experienced an influx of skilled workers from the Middle East and this has added to demand for residential property. There is a shortage of available housing in Germany, particularly in urban areas where a shift in lifestyle has seen many German citizens prefer apartment and city living with shorter commutes to work and better facilities and shopping. Even though the number of building permits granted has increased recently to try and alleviate some of the demand within the housing sector, the supply is still not high enough as population numbers and additional demand is increasing even more rapidly.
We currently have two loan offerings live on the site. They are rated A+ or A, being the two best risk ratings, and have a fixed return of 8 per cent and 9 per cent return A gross yield of 8 per cent equates to a return of 7 per cent net of our fees, and 9 per cent is 8 per cent net. If you invest via our Innovative Finance Individual Savings Account (ISA – see below for a step-by-step guide to how this works) you will receive the income tax-free.
All loans on site are eligible for inclusion in a Money&Co. ISA. If you do not have a Money&Co. ISA yet, please click on the ISA application tab on the Home page and fill in the form. You will need your National Insurance number. The ISA allowance for 2017/18 is £20,000 and you must commit funds by midnight on 5 April or you will lose your ISA allowance for this year. For full detail on the process, see below.
A Process Guide To Innovative Finance ISA Investment
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 2018/19 is unchanged from last tax year at ú20,000, 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 ú8,400 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.
It’s relatively easy to logon to our site and register to become a lender. But if that’s all too new-fangled, you can call us on 020 3143 4004 or write to Money&Co., 58 Glentham Road, London SW13 9JJ. We’ll then send you an ISA Brochure, and ISA Transfer Authority form (if you want to transfer monies from a Cash ISA) and a Freepost envelope. Then it’s just a question of following your nose to get that income…