Borrowing And Lending in P2P - Plus 9% Yield Loan Latest


Today, we look at borrowers and lenders in the world of peer-to-peer (P2P) lending. This part of the alternative finance world is all about bringing lenders seeking excellent returns on capital together carefully vetted small companies seeking funds to grow.

Our friends at P2P Finance News report that banks are not helping too much on the lending side. PEER-TO-PEER lenders have been turned away by banks when trying to open the client money accounts that are legally necessary for them to operate. Despite the vast majority of platforms now being fully regulated, Peer2Peer Finance News has seen messages from high street and challenger banks showing they are reluctant to accept clients in the P2P sector – particularly property lenders – because of concerns over anti-money laundering (AML) compliance. Frazer Fearnhead, founder of P2P buy-to-let and development lender The House Crowd, said that he was refused by a number of banks when trying to open a client money account, while other firms have reported similar experiences in the past.

Meanwhile, lenders with Money&Co. have averaged over 8 per cent gross over more than four years and £11 million-plus of facilitating loans on our platform. The latest offering, an A-rated, property-backed loan with a fixed yield of 9 per cent and a five-year term, is 60 per cent filled. Here, Nicola Horlick, Money&Co.'s CEO, argues in Business Cloud that P2P lending is safer than investing in the stock market.

Get free Future of FinTech tickets here - limited edition

Good news. A change in sponsorship arrangements has freed up a tranche of free tickets for the Future of FinTech breakfast on 12th July in London. Money&Co. CEO, Nicola Horlick, will headline the event. Numbers are limited, please use this link to claim your place now.

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 £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.

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Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.