The peer-to-peer lender plans to offer an Innovative Finance Individual Savings Account by the end of April.
Berkshire-based commercial property lender Proplend has received approval from by Her Majesty’s Revenue & Customs as an ISA manager, paving the way for the firm to offer an Innovative Finance ISA.
Proplend specialises in sub £5m commercial property loans, secured by property located in England and Wales. The P2P lender plans to offer an IFISA by the end of April.
“Since we announced news of our full FCA authorisation on 1 March, we’ve received a flood of enquiries about the IFISA. We are now working hard to make the Proplend IFISA available by the end of April and to give peer to peer investors the credible alternative of investing on one of the safest P2P lending platforms in the UK,” Brian Bartaby, founder and CEO of Proplend, said.
The IFISA was launched by former Chancellor George Osborne in April 2016 and allows individuals to include income from P2P platforms as part of the current £15,240 allowance, which will rise to £20,000 in April.
Investors have flocked to the few dozen or so platforms that have been approved, seeking a higher return than cash and stock ISA’s. However the three biggest lenders, RateSetter, Zopa and Funding Circle, have not yet been fully approved by the FCA.
While investments made through an IFISA are not protected by the Financial Services Compensation Scheme, Proplend mitigates lending risk by requiring they are the first in line to be paid, Bartaby says.
Clients will be able to invest part or all of their allowance for the 2017 to 2018 tax year in the ISA or transfer funds from an existing ISA. The expected rate of return is between 5 per cent and 12 per cent per year for individual investments. The minimum investment is £1,000.
Investors are able to lend on a deal by deal basis through Proplend, choosing from those in funding or on the secondary market. The firm also offers three levels or tranches of investment, which allows investors varying levels of risk appetites and return requirements for the same loan offer.