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Peer2Peer Finance News | August 20, 2019

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Downing launches crowd bond IFISA

Downing launches crowd bond IFISA
Marc Shoffman

ASSET-BACKED crowd bond provider Downing has become the latest firm to enter the Innovative Finance ISA (IFISA) market.

The platform, which lets investors lend to businesses using bonds, made its IFISA live last Thursday for testing but only informed users this morning.

For a minimum investment of £100, investors can access a weighted average return of 5.79 per cent depending on the projects they invest in.

Read more: Goji signs up four IFISA providers
Read more: The top IFISA rates

The first bond offer to be included in the Downing IFISA features a £1.39m funding opportunity for Alternate Energies, which owns an established portfolio of solar panel systems on residential buildings owned by Colchester Borough Council.

Currently there is no secondary market to sell the bonds but Julia Groves, head of crowdfunding for Downing, said this should come online by the summer.

She said there were four more projects in the pipeline that would open in the next few weeks.

Investors do not need to choose the project yet but will need to subscribe their IFISA money before the end of the tax year, if they wish to take advantage of this year’s ISA allowance. However, their money will not earn any interest until it is invested in a project.

“Despite any good intentions to invest early, the end of every tax year inevitably sees investors flock to ISAs at the last minute – it’s simply human nature,” she said.

“But investors should still take time amidst the rush to shop around, particularly in today’s low interest rate world.

“Different types of crowdfunding often get lumped together as being too risky but crowd bonds are actually a very simple form of lending that can, in many ways, be less complex and risky than traditional equity investing.”

Groves told Peer-to-Peer Finance News that 30 per cent of queries come through financial advisers and said she was anticipating many ISA transfers from previous years as well as new subscriptions.

“The IFISA provides a middle ground between a cash ISA where returns are derisory and stocks and shares where there is more volatility,” she added.

Read more: Goji launches P2P bond for adviser market