IFISA and P2P lending

masonic

Yes, there's a well maintained thread here: http://p2pindependentforum.com/thread/7741/fca-authorised-ifisa-list

No significant players on that list yet, except FundingSecure and MoneyThing, neither of whom have HMRC permissions yet.

the_learner

masonic wrote: »

Yes, there's a well maintained thread here: http://p2pindependentforum.com/thread/7741/fca-authorised-ifisa-list

No significant players on that list yet, except FundingSecure and MoneyThing, neither of whom have HMRC permissions yet.

Based on what you said I could go with one in the list if offering a good return? I saw there is also Goji that also offer a £100 welcome bonus

masonic

the_learner wrote: »

Based on what you said I could go with one in the list if offering a good return?

You could, although P2P is a very young sector. Lots of platforms are popping up all of the time, and it is the newest of these that have been given priority when the FCA was granting authorisation to operate. The older established platforms were operating under interim permissions, so were being processed in the background, so none of these currently has an IF ISA offering.

It is inevitable that platforms will disappear, or significantly change their business model, or fail to invest all of the cash pouring into them. I'm hesitant to hold an ISA with a platform unless I think it is going to stick around for the long term. That would certainly factor into my decision.

I currently use 5 different platforms. I also have an IF ISA with Abundance, but I am unconvinced it will be able to bring enough loans to the platform to be a viable option, so I'm intending to transfer it when I have other options.

I saw there is also Goji that also offer a £100 welcome bonus

Goji is an aggregator service. It might be a good option if you want to invest in one of the platforms it works with.

the_learner

masonic wrote: »

You could, although P2P is a very young sector. Lots of platforms are popping up all of the time, and it is the newest of these that have been given priority when the FCA was granting authorisation to operate. The older established platforms were operating under interim permissions, so were being processed in the background, so none of these currently has an IF ISA offering.

It is inevitable that platforms will disappear, or significantly change their business model, or fail to invest all of the cash pouring into them. I'm hesitant to hold an ISA with a platform unless I think it is going to stick around for the long term. That would certainly factor into my decision.

I currently use 5 different platforms. I also have an IF ISA with Abundance, but I am unconvinced it will be able to bring enough loans to the platform to be a viable option, so I'm intending to transfer it when I have other options.


Goji is an aggregator service. It might be a good option if you want to invest in one of the platforms it works with.

I was looking at Abundance and I can see there is no project I could invest in at the moment. And on the marketplace they are all selling above 100% average price to capital which, if I understood correctly, is basically reducing the return I will get.
For example they are selling at 107% a project that has a 12% return with 10 month remaining. Given I am overpaying 7% my investment, this loan actually yields 5% over 10 months.
Provided I understood that correctly.

masonic

the_learner wrote: »

I was looking at Abundance and I can see there is no project I could invest in at the moment. And on the marketplace they are all selling above 100% average price to capital which, if I understood correctly, is basically reducing the return I will get.
For example they are selling at 107% a project that has a 12% return with 10 month remaining. Given I am overpaying 7% my investment, this loan actually yields 5% over 10 months.
Provided I understood that correctly.

The yield is probably more like 3% over 10 months. If you treat the interest as 1% per month, then it takes 7 months for you to break even, then in the final 3 months you'd make your return. That's the hallmark of a platform with not enough investment options. People are willing to buy at silly prices just so that their cash isn't sitting idle. Nobody wants to sell unless they can make a lot of profit.

Buying at a premium can be worse if the loan is repaid early. You could end up with a negative return if you were really unlucky. Some loans do not allow early repayment of course.