A NEW peer-to-peer loan will allow investors to gain up to 30 per cent tax relief while funding social enterprises.
The specialist loan is being offered by Community Chest Business Loans, a social investment venture which was created by the founders of ThinCats. Loans will be made available to community development projects in order to fund small- and medium-sized businesses and social enterprises.
These loans are eligible for Social Investment Tax Relief (SITR) at 30 per cent in the first year of a three-year loan or Community Investment Tax Relief (CITR) at five per cent per annum on a five-year loan.
Investors can access these returns by taking a fixed income investment in one of the Community Chest businesses via an online auction.
However, unlike the other loans offered on the ThinCats platform, the Community Chest loans are unsecured, and all investments must be maintained for a fixed period of time. This means that the loans cannot be sold on the ThinCats secondary market.
“Community Chest is breaking new ground by providing a unique and tax-efficient way of investing in P2P, which I believe will be popular with investors, while delivering a vital new route to funding for social enterprise right across the UK,” said Kevin Caley, founder and chairman of ThinCats.
“I hope developments like this encourage further innovation in the cutting-edge fintech sector, and continue to drive momentum toward a new landscape for lending in the UK.”
The first Community Chest deal has gone to ART Business Loans, and represents a £500,000 investment in SMEs in the West Midlands.
ART Business Loans has previously invested in the Michelin star and Great British Menu winning chef, Glyn Purnell, who used his loan to open his own restaurant in Birmingham.