JUSTUS has opened registrations for its Innovative Finance ISA (IFISA) to its existing investor community.
The Cheshire-based peer-to-peer lender said on Wednesday that it is “very close” to launching its tax-free wrapper and existing investors can now apply for an ISA account.
“Given the level of anticipated demand, we are planning for the process from application to account opening being two to four weeks,” the firm said.
Founder and chief executive Lee Birkett told Peer2Peer Finance News that new investors will have to join a waiting list and will probably have to wait until early 2018 to lend through the IFISA.
“We expect to attract £10m purely from existing investors over the next few months,” Birkett said.
To avoid ‘cash drag’, whereby money is deposited into the ISA and is waiting to be deployed, funds that are deposited into the JustUs ISA access pot will receive returns of 1.2 per cent until they are lent out.
During this period, the ISA cash will be held in the Barclays Bank JustUs Isa client account.
“We have researched the market and are not aware of any other easy access ISA account paying this level of return,” the company said.
“The result is that with the JustUs ISA, lenders will not be disadvantaged by cash drag. However, please remember that the cash held in the Barclays client account is not covered by the financial services compensation scheme, but does qualify to be held in your JustUs tax-free ISA wrapper.”
Once funds are ready to be deployed, investors have three options. A ‘prudent’ ISA account which will earn up to 4.16 per cent per year; a ‘balanced’ ISA account which will earn up to 6.51 per cent; and an ‘adventurous’ ISA account that earns up to 9.79 per cent.
“The ISA is a huge and exciting milestone for all platform stakeholders, and I wholeheartedly thank you for your support to date,” Birkett said in an email to investors.
Read more: JustUs hires Santander’s Mike Moroney as COO
JustUs plans to offer a range of products, including bridging loans, unsecured loans, guarantor loans and buy-to-let mortgages, at borrowing rates it says are below the market average.
The firm, which gained full Financial Conduct Authority approval in September, launched as eMoneyHub in July 2012. Its backers include Sir John Hegarty, co-founder of well-known ad agency BBH, who has backed the firm via his start-up incubator The Garage Soho.