Ultimate guide to Innovative Finance ISAs: Part five
AS THE end of the tax year draws ever closer, it is an ideal time to choose from one of the numerous Innovative Finance ISAs (IFISAs) on the market.
Most IFISAs concentrate on consumer, business or property peer-to-peer lending – we’ve covered these in the first four parts of our Ultimate guide to Innovative Finance ISAs.
There are some IFISAs that don’t fit neatly into these three categories. In this article, we sum up the ‘best of the rest’.
Abundance
The Abundance ISA enables people to invest in green and social infrastructure projects in the UK.
The current open investment is Atlantis Future Energy, which is offering an eight per cent annual return over a five-year term.
The platform is also offering a 1.5 per cent annual return on ISA cash balances until 31 July, so investors can even start earning a return before investing in projects.
Basset & Gold
Basset & Gold enables people to invest in asset-backed corporate bonds. The lender mostly provides financing to UK lending platforms, who then provide loans through their websites, but in rare occasions it makes direct loans.
The three-year Monthly Income IFISA has a target interest rate of 6.12 per cent a year, while the three-year Compounding IFISA has a target rate of 6.7 per cent a year. Investors’ money is spread across various loans.
The minimum investment for both ISAs is £1,000.
CrowdProperty
CrowdProperty’s ISA is currently only available to existing investors. Investors lend money to property developers by making a pledge from £500. Once enough people have pledged and the total funding goal is reached, money is transferred to the developer. Loans are backed by a legal charge against the property the project concerns.
CrowdProperty is advertising a return of eight per cent.
easyMoney
easyMoney launched its IFISA last month, enabling investors to spread their money across multiple property-backed P2P loans. The target rate is 4.05 per cent a year.
The IFISA has a minimum investment of £1,000.
FundingSecure
FundingSecure is a P2P pawnbroking platform which lends against assets such as jewellery, property, classic cars and fine art.
Its IFISA is offering returns of up to 16 per cent in return for a minimum £25 investment into consumer and property development loans. The loan period is six months.
Fyzz
The Fyzz ISA specialises in funding film and entertainment projects. It offers returns of up to five per cent a year before fees over a 60-month term. Investors can follow projects from pre-production through to the big screen.
All loans are secured, asset-backed and linked to contracted revenue streams and distribution agreements, meaning returns are not dependent on the ultimate execution or box office performance.
The minimum investment is £2,000 before fees.
Goji
The Goji IFISA is a tax-efficient way to invest in Goji’s Diversified Lending Bond, which invests across loans originated via peer-to-peer lenders. The bond aims to generate a target net return of five per cent after fees. The minimum investment is £1,000 and the investment term is 12 months.
The Diversified Lending Bond product is intended for professional, sophisticated, high-net-worth and restricted investors.
HNW Lending
HNW Lending enables people to invest in loans to individuals and businesses that are backed by assets such as property, cars, pensions and fine wine. Lenders choose which borrowers they wish to lend to. The minimum investment is £10,000.
The rate of interest varies from around six to 15 per cent, depending on the length of the loan and the risk. Loans can vary from a few months to several years.
Lendahand Ethex
The Lendahand Ethex IFISA lets investors invest into crowdfunded bonds issued by solar companies. It aims to increase access to off-grid solar for families in sub-Saharan Africa.
Investors choose which projects they want to back. The projects typically offer a return of between five and six per cent.
The minimum investment in each project is £50.
Mongoose Crowd
The Mongoose Crowd ISA lets people invest in renewable energy projects via mini bonds. The minimum investment is £100 and the bonds offer returns of around five per cent.
Oaksmore
The Oaksmore IFISA enables investors to back traditional buildings that have fallen into disuse or disrepair and help to bring them back to life. Investors choose between a two- or five-year bond and can earn interest of up to 7.5 per cent a year.
The minimum investment is £1,000.
Rebuildingsociety
Rebuildingsociety provides loans to UK small- and medium-sized enterprises (SMEs). Investors choose which business they want to lend to, and the minimum investment for each loan is £10.
The average net return on the platform is 9.7 per cent.
Triodos Bank
Triodos Bank’s IFISA enables people to invest in crowdfunding opportunities with an ethical focus. Open investments include a 5.5 per cent bond offer for a charity supporting people with learning disabilities and a seven per cent bond for the installation of renewable heat pumps in retirement homes.
Triple Point Advancr
Investors can put their money into Advancr Secured Bonds, which are diversified across more than 45,000 SMEs. Investors choose an investment term of one, two or three years and an income frequency of monthly or at maturity. The platform is currently advertising rates of between 4.85 and 5.9 per cent. The minimum investment is £1,000.
Read our previous guides on consumer, business (parts two and three) and property lending-focused IFISAs.
