PROPLEND launched its Innovative Finance ISA (IFISA) on Tuesday to pre-registered investors.
The peer-to-peer property lender, which received ISA manager status from HMRC in March, had previously said it was planning to launch its tax-free wrapper by the end of April.
“We decided to make the ISA flexible, which made it more complicated and delayed the launch,” chief executive Brian Bartaby told Peer2Peer Finance News.
“We thought it would be more appealing for investors to be able to withdraw and replace money in the wrapper within the same tax year.”
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Bartaby said that around 500 customers had pre-registered for the product by last Friday, who are now able to have a separate ISA account on the website.
“We’re giving priority to people who previously registered,” he said. “We will see how it goes for the next month and then open the ISA out to more pre-registered investors.”
Individuals will be able to pick and choose which investments will go into their IFISA product, as they would with the typical Proplend offering. As such, interest rates will vary between 6.5 per cent and 14 per cent, providing the same returns as the original product, Bartaby said.
“The people who pre-registered for the ISA are a mix of existing and new lenders,” he added.
A number of platforms have experienced an influx of investors after launching their IFISA, creating a backlog of funds that they could not lend out straight away. Lending Works had to close its IFISA to new money after just 24 hours due to exceptionally high demand.
However, Bartaby said that he was confident that Proplend could deploy higher volumes of IFISA money.
“There’s enough capacity there to take quite a bit of funding,” he said.
“Yesterday, we passed the level of secondary market funding for this year to date that we did over the entirety of 2016. This month was a record month for our secondary market.”
As Peer2Peer Finance News previously reported, Proplend is considering launching a low-risk tranche A IFISA to cater for more passive investors. Bartaby said that the firm is still planning to do this later in the year but is focusing on the first IFISA at the moment.