Proplend is featured in the latest edition of Peer to Peer Finance News’ Magazine with founder and CEO Brian Bartaby discussing the issue of foregone ISA earnings within Cash ISAs.
The article entitled ‘Welcome Returns’ focusses on the credible alternative of investing old Cash ISA ‘pots’ in an Innovative Finance ISA (IFISA) with approaching £7bn exiting cash ISAs in the six months to November 2017.
It also references a recent Money Mail report claiming that ISA savers endured the lowest returns since they first launched in 1999 – a chunk of that undoubtedly diverted to IFISAs for inflation-beating returns. “The whole point of putting money into an ISA is that there’s a tax advantage, but if you’re actually losing money because interest rates are not beating inflation then there really isn’t much financial benefit,” explains Brian Bartaby.
Any ISA holder transferring funds from a Cash to Innovative ISA needs to be aware that capital is at risk with the latter. But IFISA providers typically establish alternative measures to mitigate investor capital risk as Brian explains:
“All Tranche A loans are backed by commercial property with LTVs of 50 per cent or less, … the value of the property would have to fall by more than 50 per cent for investor’s capital to be eroded. To put this in context, property prices fell by around 40 per cent during the 2008 financial crisis.”
“Proplend’s Tranche A gives new investors a reassuring entry point into P2P lending, … There’s significant security, there’s income derived from the property and there’s diversification.”
Tranche A loan investments on Proplend’s platform currently boast the maximum five PLUS rating from peer to peer specialist ratings agency 4thWay and will be available to Proplend Lenders using their new Auto-Lend feature when it launches in the next few months.
Proplend Auto-Lend investment option will be available on both ‘Classic’ and Innovative Finance ISA accounts, offering low involvement investing and and automatic diversification with a target return of 4.5-5%.
With its current manual loan selection model, Moneywise nominated Proplend as one of their picks for experienced investors. Whilst manual selection will still be facilitated going forward, the Auto-Lend option should help make Proplend’s commercial property-secured loan investments more accessible to less experienced P2P investors too.
Related to this post …
The full ‘Welcome Returns’ article is available on Peer to Peer Finance News website.
Want to find out more about P2P Lending and the Innovative Finance ISA?
We have a raft of information available about peer to peer investing in our Investor Help Centre. Alternatively, browse our comprehensive IFISA guide to find out more about tax-free investing through a flexible ISA.
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