We have a new A-rated, 8 per cent fixed yield, three-year loan offering on site. North East Property Developments, according to the borrower, "manages buy-to-let portfolios for individuals in the North East of England. The individuals invest their money and the company then sources properties on their behalf, refurbishes them and then lets them on long-term leases to local authorities (Sunderland, Gateshead, Hartlepool and Newcastle), Compass and G4S. In addition to individual investors, it also has a number of institutional investors. The Special Purpose Vehicle (SPV) will purchase three residential properties, refurbish them and then let them to corporate partners of NEPI..."Max Armstrong [the principal] has successfully bought, refurbished and let many properties in the North East. His principal business has an in-house residential property management team, which currently manages 200 properties. The focus has been on working with local authorities and companies with government contracts and this has resulted in long tenancies and very few voids or non-payments of rent. NEPI has consistently achieved 95% occupancy across its portfolio of managed properties."For more detail, login to read the full narrative offered by the borrower. As ever, we have made best effort to ensure the truth of these representations, but cannot warrant that they are true (See our standard terms and conditions).
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Our other current loan offering is also A-rated and property-backed with a fixed-rate yield of 8 per cent, and a term of five years. It's proving popular, and is currently 72 per cent filled. Our lenders have achieved average returns of over 8 per cent on the more than £12 million facilitated by Money&Co. in the past four years. All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (ISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income.
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.