LENDINGCROWD has become the latest peer-to-peer lending platform preparing to offer an Innovative Finance ISA (IFISA) to investors.
Stuart Lunn (pictured), chief executive of LendingCrowd, said it plans to launch the tax-free wrapper around P2P investments during the first quarter of 2017.
Lunn said an application for ISA manager status was submitted to HMRC just before Christmas and he expects it to take between two to three weeks to go through.
Once approved, the LendingCrowd IFISA will work differently to the rest of the platform, so rather than investors selecting their own loans, the product will automatically allocate, invest and diversify a minimum of £1,000 and aim for a target rate of 6.5 per cent.
Lunn told Peer-to-Peer Finance News: “Each investor will still have an underlying portfolio of loans.
“We have surveyed investors and there is lots of interest in growth products. Our IFISA will reinvest capital and interest but investors will be able to withdraw funds at any point.
“There may also be scope for an income- focused product but we are starting with a growth version.”
LendingCrowd received Financial Conduct Authority (FCA) authorisation in November but is still awaiting ISA manager approval from HMRC.
The Edinburgh-headquartered platform has facilitated more than £9m of loans and has around 2,000 investors, including a partnership with the Scottish Investment Bank.
“While we are not the biggest P2P platform in the UK, the investment made in our people and technology combined with the FCA approval has positioned LendingCrowd right at the front of the market when it comes to alternative financing of UK SMEs,” said Lunn.
“We intend to build on this position of strength in 2017, continue to innovate for the benefit of our clients and will be updating the market on plans to launch our ISA during the first quarter.”