lending small biz savings via p2p - accountancy ramifications

chiefnoodle

Hi

Our small business has managed to accumulate £2000 since it opened 9 months ago, and I expect this to increase by about £300/month for foreseeable future. Savings a/cs for SBs have rates even more dismal than normal savings accounts, so we were thinking of lending the money out on P2P. Lendinvest looks promising as the loans are property secured.

The question is whether this will cause massive complications with the book keeping. We have an accountancy firm which charges £80/hour, so if there is going to be a big bill from them then this will offset much of the interest from the p2p, so will not be worth the hassle.

Does anyone lend money from their small business who can advise how much extra work this makes for the accountant at the end of the year?

If there are any other complications/issues I haven't thought of it'd be great to hear now also...

Have googled extensively but been unable to find any articles about this specifically

Thanks a lot!

bengalknights

Personally i would keep the funds in hand as opposed to lending out just so you have it when it is needed

antrobus

chiefnoodle wrote: »

... Does anyone lend money from their small business who can advise how much extra work this makes for the accountant at the end of the year? ....

About 5 minutes worth.


So long as you give your accountant the statements for the investments.

Pennywise

antrobus wrote: »

So long as you give your accountant the statements for the investments.

That's the key - these type of peer to peer lending don't have the usual monthly statement like a bank account would. They're a real pain in the bum to try to find out what's actually happening with the actual detail, i.e. interest, dividends, gains, advances, withdrawals etc, which is what the accountant needs to know as different components are declared differently in the accounts and returns. You need to get into the habit of taking reports or screen-shots showing exactly what is going on "under the bonnet" and file them away safely to show the accountant.

Have you actually asked the accountant and taken their advice as to whether to invest in the first place, and then what reports they need to see? That's probably your first port of call.

chiefnoodle

thanks everyone for all the great advice

charlie__brown_2

We've found it pretty straight forward - we send our statements to our accountant when he's preparing the accounts - nice to actually earn interest rather than just pay bank charges! We use Growth Street who pay 6.5% and can withdraw funds with 30 days notice.

[Deleted User]

charlie__brown wrote: »

We've found it pretty straight forward - we send our statements to our accountant when he's preparing the accounts - nice to actually earn interest rather than just pay bank charges! We use Growth Street who pay 6.5% and can withdraw funds with 30 days notice.

Love a newbie here at MSE.

However, it's nice to give a full story, and a quick 5 second look indicates at least a couple of things you failed to mention in your glowing report you posted (twice today too, so I'll have to add this to the other thread too)

This is an investment product and not a savings account. Capital is at risk and Growth Street is not part of the Financial Services Compensation Scheme.

and

As one of our first lenders, you will receive a return of 6.5% AER on matched funds during this private beta phase. When we launch our marketplace to a wider set of customers later in the year, we expect lenders to earn 4% AER on average, ...

Anthing else you may have missed out? :cool:

Edit: here's another

Growth Street is not currently regulated by the FCA, but we have applied for full permission to allow individuals to lend. We are in the latter stages of this process and expect to be fully regulated later in the year. Until we have permission, we will only be able to offer access to our lending marketplace to Limited Companies and Limited Liability Partnerships.