CAR leasing firm the XL Group has raised £1m through business lending peer-to-peer platform Crowdstacker, in what is believed to be the first asset finance deal that can be held in an Innovative Finance ISA (IFISA).
XL Group said it will use the investment, backed by 255 Crowdstacker lenders, to bolster its short-term contract hire business.
The firm purchase vehicles at substantial volume discounts, which are then leased on to its individual and business customers for short terms of six, 12 and 18 months.
The XL Loans investment offered a seven-month term with a four per cent return. The short term is set to coincide with one full cycle of XL’s car hire lease period – including the time taken for XL to lease a car through to the pre-agreed buyback agreement with the car manufacturer.
The deal was facilitated by finance brokers Trade Finance Global.
It can be held in Crowdstacker’s IFISA as well as its standard P2P account.
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“This new automotive sector investment opportunity allows our investors to diversify their portfolio even further, whilst still taking advantage of the tax-free earning potential offered by the Innovative Finance ISA,” Jonathan Littlewood, chief operating officer of Crowdstacker, said.
Meanwhile, Crowdstacker’s own fundraising attempt on Seedrs has so far hit 57 per cent of its £800,000 target.
The funds raised will be used to develop the technology, recruit staff and expand its marketing.