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Peer2Peer Finance News | August 18, 2019

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Non-P2P firms target IFISA market

Non-P2P firms target IFISA market
Marc Shoffman

SEVERAL firms outside of the peer-to-peer lending sector are looking to enter the Innovative Finance ISA (IFISA) space.

P2P administrator Goji says it is in talks with existing financial product providers such as venture capital trusts (VCTs) and enterprise investment schemes (EIS) about providing IFISAs.

VCTs and EIS are already regulated and ISA-eligible so would find it relatively easy to launch an IFISA.

This would follow a trail already left by P2P platforms such as Octopus Choice and Downing, which both stem from companies with a VCT arm.

Read more: P2P firms alert HMRC to IFISA issues

Jake Wombwell-Povey, chief executive of Goji, said much of this interest is driven by recent changes in the VCT and EIS sector.

The government announced in 2015 that companies older than seven years will no longer will be able to receive funding from a VCT or EIS and firms with more than 250 employees will also be excluded.

Furthermore, VCT money can no longer be used to fund management buyouts, a previously popular method among the funds.

“The government has tightened up VCT rules and now some managers haven’t raised as much or any new money,” Wombwell-Povey said.

Read more: LandlordInvest shifts IFISA admin to Goji as it hits half a million mark

“We are looking to help those offering retail lending products outside of P2P who are trying to access the IFISA market.

“We will soon see more established names looking into the tax wrapper, which will make the sector more exciting.”

Meanwhile, Goji is still working with several P2P providers awaiting authorisations, while its own IFISA-eligible P2P Lending Bond has raised £7m since its launch in March, Wombwell-Povey said.

He said he expects investor interest to increase towards the end of the tax year once the IFISA gets more “airtime” in ISA season.