If Invest & Fund goes into administration the business would continue to run and the client accounts would be managed by the appointed administrator.
Any monies held in the client account are totally ring-fenced and held for the beneficial interest of the Lenders. We have a third-party ‘lifeboat’ facility in place, to ensure the unbroken continuous operation of the exchange.
Visit www.investandfund.com to see what we have to offer. If you believe Invest & Fund could be the right way for you to raise required funding, simply register as a prospective Borrower and complete the on-line loan application located on your Borrower's homepage. This starts the process and our team are available to help throughout the process.
The minimum amount you may borrow is £250,000, and the largest sum you may borrow is £5 million, but this may be increased in the right circumstances.
Applications from limited companies, partnerships and trusts that are not an individual or relevant person for property development and bridging finance in England and Wales will be considered, however loans involving principal private residences are excluded. Applications are preferred for residential property or a blend of mostly residential with an element of commercial e.g. a shop may be located below a block of flats. First charge security is usually required, second charges only being taken in exceptional circumstances. An equity stake from the Borrower or their associates is a pre-requisite, as a maximum loan to value of 75% shall be applied.
The interest rate may be fixed. If this is the case then the rate is agreed before the loan goes onto the lending marketplace. The Lenders bid at the predetermined rate and it is a ‘first pass the post’ basis.
There is an Arrangement Fee payable equivalent to a percentage of the total amount borrowed, variable with the term over which repayments are to be made (see Fees). This fee shall be deducted from the loan prior to transfer of the funds, i.e. the Borrower shall receive the net amount of the loan, and so you may wish to build this fee into the amount you are seeking to borrow. The Borrower shall pay interest on the loan at the Borrower's rate. Should a Borrower default on a loan repayment, any reasonable costs incurred in debt recovery, shall be recharged to and recovered from the Borrower. All interest rates are calculated on a per annum basis.
Invest & Fund offers monthly terms between 3 and 24 months. Longer terms may be possible upon enquiry.
All loans will to be secured against 1st charge on property. In exceptional circumstances a 2nd charge may be required. Additional security may be required in the form of debentures and/or guarantees in support of the quality of the charge.
Yes, we use one of the country's foremost credit checking companies. We also perform far reaching due diligence on the Borrower, directors and their agents.
Yes, and the agents of the company e.g. solicitors, accountants, surveyors.
Invest & Fund will provide reasonable assistance to help guide you through the process.
The information you disclose is entirely up to you, but remember you are trying to attract Lenders to lend you money. Information must be correct and should not misrepresent the facts.
You should complete the loan request template provided and include all relevant information.
You should also answer the questions posed by Lenders in the Q&A forum.
The bid period lasts for up to 10 days, but the Borrower, at their option, may end the bidding process at any time if the loan requirement has been achieved.
Once the bidding process has concluded, the Borrower has a cooling off period of up to 5 working days, to decide whether to drawdown the funds. This cooling off may be waived in total or in part by the Borrower.
No, you are under no obligation to take the loan, and have five working days from the end of that process to make a firm decision.
Yes, five working days from the end of the bidding process.
Once a bid is made, the Lender is committed to honouring that bid. Money is allocated from the Lender's account to cover the bid, and is only returned to the Lender in the event that the bid has been bettered, or the Borrower has failed to attract the required amount or has declined to drawdown the monies.
Invest & Fund has been created to provide finance for property companies looking for bridging and development finance in the residential market. Other types of property finance may be considered.
The Lenders are individuals, institutions and companies who understand the difficulties small and medium sized property companies have raising funds in today's financial environment, and want to help businesses such as yours grow and prosper, whilst getting a real return on their money above inflation, unavailable from traditional financial institutions.
This should not ordinarily happen, and there is no reason a Lender would need to see you unless by mutually agreed prior appointment. Your business address is in the public domain, however under the terms and conditions of registration accepted by the Lender, they have agreed not to visit the Borrower without prior appointment.
You should notify Invest & Fund immediately if you believe a repayment will not be met, together with your proposals to bring any arrears up to date, and what your intentions are going forward. Invest & Fund retain a professional firm of debt management and recovery consultants who will monitor your situation and will put in place the necessary procedures to ensure compliance with the Terms & Conditions you have agreed to.
You may repay the balance of the loan and accrued interest at any time during the term without penalty or charges, although this is generally subject to a minimum interest equivalent to 91 days accrued. Your Facility Agreement will be explicit on this point.
You may apply for additional funds at any time following an initial six-month period of unblemished repayments.
Details of your existing loan(s) will be disclosed and it is for potential Lenders to determine whether they would be willing to lend further monies and at what rate. Currently the minimum amount you may borrow is £250,000, and the largest sum you may borrow is £5 million but this may be increased in the right circumstances.
You may be both a Borrower and a Lender. You will need to register separately as both, and undergo the different checks that are in place for both distinct parties.
Repayments are made by simple standing order on set days each month throughout the term of the loan. These single fixed monthly payments are made to the Invest & Fund clients' account, who will administer the apportionment between the Lenders on your behalf.
Loans that have rolled up interest are payable as capital and total interest at the end of the term. You will be advised a settlement figure during or at the end of the term as applicable.
The Q & A blog is open throughout the term of the loan, although activity is expected to be minimal after drawdown. You can post news of your business on your pitch page at any time. How much more you wish to interact with Lenders is at your own discretion.
No, there is not. If monthly repayments form part of your loan then you will need to put in place the necessary payment instructions.
For property development loans you will need to submit utilisation requests, and any supporting information, in good time when you are seeking to obtain a stage drawdown against the agreed facility.
If a Borrower fails to make payments on time (or in whole), or is otherwise in breach of any term of the Loan Contract, Invest & Fund may place the company “In Default”. The effect of this is that the loan is terminated and the entire outstanding amount owed (including all interest to the end of the term plus costs of recovery) is immediately due and payable. When a loan is placed “In Default”, the Lenders are informed (on the Lender dashboard) that their loan contracts will be assigned to IFSL. IFSL is an entity, independent of Invest & Fund, that has been set up to act in the best interests of the Lenders and manage the default the process. Assignment enables IFSL to “step into the shoes” of the Lenders, which makes it easier for Invest & Fund to negotiate with the Borrower (and any guarantor), and to take steps to enforce the security.
Invest & Fund does not lend from its own balance sheet. Loans will be fully funded if the Invest & Fund Lenders find the Property Developer and the proposed Project to be compelling enough to lend against. Our loans are funded by our diverse, deep and growing population of Lenders – mainly consisting of High Net Worth (HNW) individuals, family offices, wealth managers and other institutions. Invest & Fund also has Underwriters who may be willing to step in to make up any shortfall between the amount requested by the Borrower and the amount offered by the Lenders, but underwriting is not always available. So, whilst Invest & Fund cannot guarantee that all loans will be fully funded, Borrowers are able to take comfort that all of the loans that have been posted on our Lending Marketplace to date have raised all of the funds requested by the Borrower.
Invest & Fund only places propositions onto the marketplace that we believe will be funded, and to date all of the loans that have been posted on our Lending Marketplace have been successfully funded. However, in the unlikely event that a subsequent drawdown is not fully subscribed, this is likely to require a Borrower to increase their own equity in the project, restructure the drawdown or seek an alternative source of finance.
Loans and drawdowns will not go ahead if Invest & Fund’s Head of Credit does not give his approval. The Head of Credit sees loans from an early stage so will already be familiar with a loan prior to reviewing for final sign-off. The Head of Credit may ask for additional information or evidence to mitigate a specific concern, but if a development is not progressing as it should do or places our Lenders at unacceptable risk then a drawdown may not be sanctioned.
As the name suggests a Whole Loan Lender is a Lender that provides all of the funding on a loan facility, no matter whether there is/are single or multiple drawdowns. Whole Loan Lenders have the right to use their own trustees to hold the security, to be the Lender of record and are able to exercise step-in rights should a Borrower breach any covenants.
An Underwriter is an individual or a company who looks at loan propositions and may agree to make up any shortfall between the amount requested by the Borrower and the amount offered by the Lenders, or may lend the whole amount of a loan if there is insufficient time for an auction to take place on the Lending Marketplace. Underwriting may be available on some loans although not in every case.
Invest & Fund facilitates the sourcing of finance to fund borrowers. Our lenders are not banks, they are typically individuals or SME type businesses, similar to our borrowers and are therefore also facing similar challenges as a result of COVID-19. We can consider a Variation to the timescale and this is something we will be keen to support our customers with.
It is important to note that neither Invest & Fund nor our lenders have any access to the £330bn of Government loan guarantee, i.e. existing lending or future lending is not underwritten by the Government. This support is purely for banks.
It is also important to note that interest accruing under the borrowing is due to the lenders, not to Invest & Fund and therefore we are not in a position to waive or reduce the interest rate which was contractually agreed by both borrower and lenders.
We can consider a Variation to the timescale and this is something we will be keen to support our customers with.
We have undertaken similar for many customers in the past when there have been delays for whatever reason. Our standard fee is £150 to cover the work involved although we will be looking to waive this should the only reason for the delay be related to the Coronavirus.
We can consider a bridge to sale facility over a suitable term. Proposals will be considered on their merits and we are keen to support our borrowers through these uncertain times.
Our senior lending loan to gross development value appetite is currently max 65% and our bridging loan appetite is currently max 70% so there should be capacity to agree a facility albeit an updated valuation will be required.
This is something we have supported many customers with in the past when, for whatever reason, repayment has been delayed from what was originally expected.
We are unable to confirm the interest rate at this time as lender risk/reward dynamics could change over the next few months depending upon how matters develop.
Any change in interest rate would impact the return received by the lenders and would have no financial benefit to Invest & Fund. Our aim will be to facilitate a fair arrangement for both lenders and borrowers.
There would be a fair amount of work involved for Invest & Fund in this scenario including risk assessment, drawing up facility documentation, presenting the opportunity for lenders’ consideration and following up their queries, undertaking the repayment of the existing loans and drawing down the new loan.
Our standard fee is 2% of the facility amount (in addition to any broker fee due). However, acknowledging the unique circumstances, we would be prepared to reduce our fee to 1% of the facility. Any third party charges would also fall to the borrower, e.g. valuation fee.
We are in regular contact with our major lenders. The general feedback regarding our business and our loan product remains positive but we do understand this is a fluid situation and individual circumstances may change. We have seen some lenders seeking to free up some liquidity.
Invest & Fund has contingencies in place in the event of low demand for any loans, including the support of underwriters, and this has always been the case.
All loans for existing customers have been fully funded to date and we remain confident that this will not change.
Currently there is no change to our key credit risk parameters: max 75% loan to cost and max 65% loan to gross development value for senior development finance and max 70% loan to value for bridging finance.
Loan applications are assessed on a case by case basis and are subject to usual credit risk analysis. Presently, any new requests for development finance would be closely scrutinised given the current construction risks. We would similarly expect developers to have a cautious approach to commencing new construction projects. Bridging finance requests would be subject to updated valuations and a longer term may be appropriate to allow time for the situation to stabilise and sales to complete.
Default clauses within the loan facility documentation issued to borrowers are extensive and cover a whole range of potential events, varying in severity. These can range from technical defaults such as annual accounts not being provided within the stipulated timescales, to payment default or, more seriously for example, the facility not being repaid by the expiry date which could potentially result in a loss of lender capital or interest for lenders (a potential bad debt).
Should there be an event of default, the severity, including the coverage of the loan against the security, will be considered when deciding upon the most appropriate course of action. Available actions may include; issuing a permanent waiver (e.g. Invest & Fund accepting that whilst a breach of the original terms has taken place it is appropriate in the circumstances to waive that term), or a formal default being called which could ultimately lead to a demand for repayment and recovery action, should the event of default not be satisfactorily addressed following an appropriate period of forbearance. Therefore, an event of default will not always lead to a bad debt and the severity of the event and the level of security cover held both need to be taken into account in determining an appropriate course of action.
The shortest loan that may be offered on the platform is 6 months and the longest that may be offered is 36 months, in monthly increments.
Part or all of a loan may be offered for resale to other Invest & Fund members after the first repayment has been received, via the Resale Marketplace. This secondary market allows previously funded loans to be offered at a premium of up to +10% or a discount of up to -10% and provides Lenders with liquidity if a resale is achieved.
The minimum bid on a loan on the Lending Marketplace is £500.
On the Resale Marketplace, the minimum bid is £500. If a loan is offered for resale that is lower than £500, then the full amount must be purchased.
There is no maximum bid on either marketplace.
We accept deposits via internet banking or bank transfers (e.g. BACS or CHAPS).
Please refer to your ‘My Account’ page for full details.
If for any reason you have a complaint or concern concerning the operation of the service please contact us by email at firstname.lastname@example.org with brief details of your complaint and your account number. We have a written complaints procedure which can be viewed here.
Subject to certain criteria being met, lending may be possible through a Lender’s SIPP(Self Invested Personal Pension) or SSAS(Small Self Administered Scheme). We will liaise with your SIPP/SSAS provider if this is of interest to you. Please contact us for more information.
Invest & Fund launched an Innovative Finance ISA (IFISA) in November 2019. Please click here to visit the IFISA home page to find out more information.
Active Capital Employed (ACE) is a live indicator of the % of capital lent through the Invest & Fund marketplace.
To make sure your capital is working for you, the ACE % you see on the 'My Account' page should be as close to 100% as possible.
Invest & Fund is committed to following all applicable laws and regulations to ensure that the firm's business is not used to facilitate money laundering.
The firm employs a risk-based approach and determines the appropriate client due diligence measures to be carried out on Lenders on a risk-sensitive basis, depending on the type of client and the project in question.
We can only accept Lenders that have a residential address in England, Scotland, or Wales, are over 18 and hold a UK bank account. If you are not based in the UK and/or you do not hold a UK bank account, please contact us to discuss the options available to you.
There is no registration fee for Invest & Fund Lenders. Lenders pay 0.75% per annum on outstanding funds lent through our platform via their standard account and 1.25% per annum via their IFISA account. The fee is deducted each time a Borrower repayment is made and the Lender receives funds back into their Invest & Fund account. If you sell a loan on the Resale Marketplace then a one-off fee of 0.25% of the value of the transaction will be payable on the successful sale of the loan.
The gross interest rate is typically in the range 7.00%-8.25% p.a.
There are a number of factors to take into account in order to calculate a net return, namely lender (facility) fees, default and any tax due. Remember that lenders capital is at risk of loss if a borrower defaults.
We provide a table in each new Credit Summary issued which provides an illustration of the net return for that loan taking into account these potential deductions to arrive at an illustrative net return rate. An example is shown below:
|Description and Illustrated Net Return|
|Loan interest rate||7.25%||7.25%|
|Default Assumption ¹||-0.28%||-0.28%|
|I&F Lender Fees p.a. ²||-0.75%||-1.25%|
|Net Return (post default assumption)||6.22%||5.72%|
* Loan Interest is subject to Income Tax at your marginal rate, currently 20% for a basic rate taxpayer, less any allowances which may apply. I&F is not able to provide tax advice and, if this is required, you should seek guidance from a suitably qualified professional.
* Income Tax is not payable on interest earned in an IFISA
¹ Taken from the Invest & Fund default model across the whole portfolio of loans rather than the specific expected default risk of this loan
² IFISA fees are higher reflecting costs incurred around the administration of the IFISA
Invest & Fund accounts for interest paid to Lenders net of its fees, as described above, and without any deduction for income tax.
The onus is on each Lender to properly account for any income tax that may be due to HMRC and to assist with this requirement, the Lender’s account dashboard has a statement of Gross Interest for each tax year ended 5th April. This details the Borrower Name and the amount of interest received for each loan.
In the UK, Lenders are liable for income tax on the interest that they receive, however, interest paid by Invest & Fund to individual Lenders qualifies as part of the tax-free Personal Savings Allowance announced in the 2015 Budget. This is available to basic rate taxpayers, but top-rate taxpayers are not eligible for the allowance. All sources of interest received must be aggregated in determining the Lender’s total interest against which this allowance applies.
Invest & Fund is unable to offer any tax advice to individual Lenders. If you have any further queries we recommend that you should contact your local tax office or an accountant.
Lenders are notified in advance via email if a loan is to be repaid early. For Interest Rolled Up loans, interest accrues daily and is calculated using the actual/365 method. If a loan is fully repaid up to 91 days into the repayment term, then Lenders will generally receive 91 days’ interest back. If the loan is repaid more than 91 days into the repayment term, then Lenders will receive the relevant amount of accrued interest, as of the date of repayment. Interest is paid up to the date on which the settlement funds are received into Invest and Fund Limited Client bank account. However, there may be a delay of up to one working day for the transaction to show in Lenders’ accounts. Please note that the interest rate stated on a loan is a gross annual figure. For term extension loans where an I&F development or bridging loan is redeemed by another I&F loan to the same Borrower then a minimum number of days interest will generally not apply.
Loans purchased by a successful bid on the Lending Marketplace accrue interest from the date that the loan is drawn down by the Borrower. Loans purchased on the Resale Marketplace accrue interest from the date that the loan is acquired by the Lender. In both cases, the actual receipt of this accrued interest is dependent upon the loan type. Where a loan is rolled up, interest is paid either at the end of the term or earlier if the Borrower chooses to repay the full amount before the end of the term. A Lender’s account is credited with the interest attributable to their loan on the day it is received from the Borrower. When interest is paid monthly, the Lender’s account is credited with the interest attributable to their loan on the day it is received from the Borrower as with rolled up interest, but with regular payments on each monthly anniversary since draw down. In all cases, the Lender will be kept informed by email of the Borrower’s intentions should there be any variation to the full term as agreed at the outset or should a repayment less than the full amount of the loan plus accrued interest be offered e.g. where the sale of a development is piecemeal.
Borrowers are required to notify us of any event of default promptly upon becoming aware of it. Events of Default include not making payments on their due date, excluding if the failure is caused only by an administrative or technical error. If a payment is made within 3 business days of its due date, it is not a formal Event of Default. Any failure by a Borrower to comply with conditions set out in the relevant documentation may amount to an Event of Default. Similarly, any misrepresentation made by the Borrower to Invest & Fund may amount to an Event of Default. If a Borrower misses any payments, the Lenders authorise Invest & Fund to act on their behalf and contact the Borrower to attempt to collect the outstanding payment. Invest & Fund will keep the Lenders informed about any progress made and any monies received will be paid to the lenders on a pro rata basis. Invest & Fund may instruct the Security Trustee, I&F Securities Limited to enforce the relevant security documents. Please refer to the FAQ ‘When does Invest & Fund place a loan in default, and why are loans in default assigned to I&F Securities Limited (“IFSL”)?’ and the Terms & Conditions for further details.
You may e-mail us at email@example.com or phone our Customer Helpline on 01424 717564 (9am – 5pm, Mon-Fri). Alternatively, we can be reached through our various social media channels.
We will lend to UK registered companies, LLPs and partnerships with over three partners who are property developers. We consider loan applications for building, buying or re-financing projects on residential developments. We also consider loans for bridging finance.
Invest and Fund Limited is authorised and regulated by the Financial Conduct Authority (FSCS) (FRN: 711378). For further information please visit www.fca.org.uk. Invest and Fund Ltd is not covered by the Financial Services Compensation Scheme. If you have a complaint you may be able to refer it to the Financial Ombudsman Service (FOS). Please see our Complaints Policy for further details. Invest and Fund Limited (No. 8277803) is a company registered in England and Wales. The registered address is the HCP Building, Chichester Road, Ponswood, St Leonards-On-Sea, East Sussex, TN38 9BG.
The Resale Marketplace enables current Lenders to sell part or all of their loans to other Lenders.
A Lender can decide to sell all or part of one of their current I&F loans at any time, providing that the loan is not in default, using their I&F online account. The process is straightforward:
No. You may personally select which of the available loan(s) you wish to buy. For each loan that is for sale, you may also select whether you wish to purchase some or all of that loan. The minimum amount that can be bought from each loan in one purchase is £25. If a loan is posted that is less than £25, then it must be purchased in full.
The loans that are up for sale are offered either by Lenders or Underwriters. Once the Borrower application has been approved by our Credit Assessment Group for listing, it moves to the Lending Marketplace. Lenders have the opportunity to own a part of the loan from the very beginning by bidding via the Lending Marketplace. Loans that are up for sale on the Resale Marketplace may be currently owned by any Lender that is simply wishing to access their capital and accrued interest from a specific loan early, for a variety of reasons or by an Underwriter who is looking to reduce their holding so that they can underwrite new deals.
The Resale Marketplace is not a reflection of the strength of a loan, and therefore the proportion of a specific Borrower’s loan that is on the Resale Marketplace should not be used to assess the risk of a Borrower. The Resale Marketplace simply provides existing Lenders with liquidity, allowing them to access their capital and accrued interest early if a loan is successfully sold to another Lender.
No, A Selling Lender is not entitled to sell Loan Parts which are in arrears (i.e. a payment of interest or capital has been missed) or which are known by the Selling Lender to be in default.
Subordinated loans are loans which rank behind one or more other loans in 'priority' of repayment and terms, examples include second (or subsequent) charge loans and mezzanine finance, such loans are described as 'junior debt.' If a secured loan is subordinated it means that there is another, pre-existing loan secured against the same property. In such circumstances where a borrower cannot repay and the security is realised, then subordinated lenders will only be able to recover money after higher ranked lenders have been fully repaid, including any interest they are owed.
Lending against subordinated debt increases the risk of loss of capital, and so should only be contemplated by experienced lenders. This is why Invest & Fund only makes such opportunities available to clients who have an FCA Regulatory Status of a Professional Client.
Events of Default include Borrowers not making payments on their due date, excluding if the failure is caused only by an administrative or technical error. If a payment is made by a Borrower within 3 business days of its due date, it is not a formal Event of Default. Any failure to comply with conditions set out in the relevant documentation may amount to an Event of Default. Similarly, any misrepresentation made by the Borrower to Invest & Fund may amount to an Event of Default. In an Event of Default, Invest & Fund may instruct the Security Trustee, IFSL, to also enforce the relevant security documents. Under the Terms & conditions of the Invest & Fund platform, in the event of a default by a Borrower, the Lenders assign their right title and interest in the Loan Contract to IFSL, the associated company of Invest & Fund, specifically set up to deal with defaults and recoveries. It is made up of three independent directors and the Invest & Fund Finance Director, with a mandate to act in the best interests of the Lenders at all times. IFSL then work with Invest & Fund on behalf of all the Lenders to recover any outstanding money due under the loan. The possible remedies available to the Security Trustee include:
Please refer to the Terms & Conditions for further details.
If, when the auction closes, there are not sufficient funds generated to cover the loan and the Invest & Fund Underwriters are not able to make up the shortfall, the drawdown will not complete and the monies pledged by Lenders via the auction will be returned to their Invest & Fund account.
Invest & Fund only places propositions onto the marketplace that we believe will be funded, and to date all of the loans that have been posted on our Lending Marketplace have been successfully funded. However, in the unlikely event that a drawdown request was under-subscribed, or was refused on credit assessment grounds this is likely to require a Borrower to increase their own equity in the project, restructure the drawdown or seek finance elsewhere. All of our loan propositions require Borrower equity to be in place at the outset which means that there should be an equity cushion as the value of the asset is likely to exceed the commitment of our Lenders, however in exceptional circumstances, should this not be adequate, then there are generally guarantees or other security to call upon, but it should be rememebered that Lenders' capital is at risk so repayment is not guaranteed.
Invest & Fund Lenders include High Net Worth Individuals, Family Offices, Funds and Companies who lend via our marketplace and the majority of our Lenders see the loans when details are posted on the Lending Marketplace, but there are exceptions to this. Some of our larger Lenders will only lend if they can take the whole loan; this is because they want to have control of any key decisions and have the security held in their name. This category of Lender is known as a Whole Loan Lender, and details of loan proposals which meet their pre-defined criteria may be provided at an early stage in the application review process, prior to being published on the Lending Marketplace. We also have a category of Lender termed as High Value Part Loan Lenders and this means that such lenders have the capability of funding a minimum £50,000 per loan. High Value Part Loan Lenders are likely to be Retail or Elective Professional Clients. These Lenders may see a loan before it is posted onto the Lending Marketplace as part of our assessment of ensuring that a loan has a high probability of being funded. Our Underwriters also see loans at an early stage. Underwriters will meet any shortfall between Lender funds and the drawdown amount, but not all loans are underwritten.
We allocate loans between Whole Loan Lenders (where loans meet certain pre-determined criteria) and other lenders on a formulaic basis. Any loan not allocated to a Whole Loan Lender will have at least some of the loan amount made available to our individual lenders via the Lending Marketplace.
Loans with a higher risk profile will only be made available to lenders who have the FCA Regulatory Status of a Professional Client (also see FAQ ‘What are subordinated loans?’)
Larger lenders who are able to lend £50,000 or more per transaction will be classified as High Value Part Loan Lenders . This means they will be offered, on a formulaic basis, transactions which meet pre-determined criteria and may subscribe for up to 75% of a loan tranche, which may be scaled back in the event of over-subscription. In all cases at least 25% of the loan will be placed on our Lending Marketplace lenders to fund.
This is set by the size of the loan and the size of its first drawdown (the size trigger). Our largest loans often suit larger and Whole Loan Lenders whereas they are self-evidently less suitable for smaller lenders where larger numbers of participants would be required. Invest & Fund will review this size “trigger” periodically and exceptions may occur from time to time.
We sometimes decide to briefly “underwrite” loans in this way for reasons of timing (including holiday season, borrower needing funds quickly etc.) and then as soon as is practicable make this available with our lenders on our Resale Marketplace (see FAQ ‘What is an Underwriter?’)
The situation regarding coronavirus (COVID-19) is changing on a daily basis. The I&F team are in regular contact with all our borrowers and we will work with them to ensure we help preserve value.
For example, where a development project requires further finance to allow it to move to practical completion, we will consider listing such requests if it is in the best interest of lenders. In other circumstances temporarily halting a project may be the most practical solution but this will be considered on a case-by-case basis.
We will continue to post updates on the platform for loans on a case-by-case basis for the benefit of lenders.
As under normal circumstances any failure by a borrower to comply with conditions set out in the relevant documentation may amount to an Event of Default. Given the prevailing conditions with respect to COVID-19 it seems likely that more projects than usual will experience delays. In such cases we will liaise with borrowers and may consider variations to timescales when these make sense for all involved.
Interest rates on I&F loans are set at the start of the loan and generally do not change. All our documentation however includes provision for enhanced interest which can be applied under appropriate circumstances. Our general preference though remains to work with borrowers to ensure any problems are resolved at as early a stage as possible.
We are continuing to work on our borrower pipeline and will list them on the platform when they reach that stage although some delays may be expected given the current uncertainty. We are aware there is appetite from lenders to continue to invest in our loan product but we will ensure our credit-focused approach to lending remains paramount.
ISA stands for Individual Savings Account. It is a government scheme to encourage saving/investment in the UK.
The ISA is not an investment. It is a wrapper around qualifying investments.
Investors hold investments free of UK income tax and free of Capital Gains Tax (CGT) liability.
The Innovative Finance ISA allows individuals to use their annual ISA allowance to lend funds through alternative finance products. Qualifying investments through an Innovative Finance ISA include:
The Innovative Finance ISA can be held alongside cash and stocks & shares ISAs to give Lenders more diversity and choice as to what to do with their ISA investments.
A Flexible ISA allows investors to withdraw and replace ISA monies within any tax year without counting towards the annual subscription limit.
There is no limit to the amount that can be withdrawn and then replaced. This applies to current and previous year ISA monies.
The Invest & Fund IFISA is a Flexible ISA
An ISA is an Individual Savings Account and is not a product in its own right. An ISA is a 'wrapper' in which you can shelter savings and investments from tax.
You can put money into an ISA, up to a set limit each tax year. This limit is known as your ‘ISA allowance’. Any returns or gains made from money placed in an ISA are not subject to income and capital gains tax. You don't even need to declare ISAs on your tax return.
There are three types of ISA available to the entire UK adult population; a cash ISA, a stocks & shares ISA and an innovative finance ISA. The Lifetime ISA is available for those between 18 and 40 and launched in April 2017. The Junior ISA is available to those under 18.
A cash ISA allows you to make the most of your savings because the interest you earn is free from tax. A stocks & shares ISA is a tax-efficient way to invest in shares and securities.
An Innovative Finance ISA allows P2P lending and debt-based securities to be put in an ISA wrapper. Peer to Peer lending is when individual Lenders lend to borrowers, usually through an online platform, like Invest & Fund.
The annual ISA subscription limit may vary each tax year (tax years run from 6 April to 5 April.)
The subscription limit for 2019-20 tax year is £20,000.
You may consult the government website for the current subscription allowance.
You can subscribe to one cash ISA, one stocks & shares ISA and one innovative finance ISA in each tax year. You may split your ISA allowance between the different ISAs.
In the next tax-year you can subscribe to an additional ISA of each type again.
To open an innovative finance ISA you must be 18 or over.
For all ISAs you must a resident in the UK or a Crown servant (e.g. diplomatic or overseas civil service) or their spouse or civil partner if you do not live in the UK. You cannot hold an innovative finance ISA with or on behalf of someone else.
You can check your residency status on the HMRC site below:
If you make a cash subscription to your ISA account, the amount subscribed will use part of your ISA allowance, even if you do not use this subscription to make an investment.
If you do not use up your subscription limit, it will not be carried over to the next year.
Lenders have the right to withdraw money or close their Invest & Fund IFISA by request (subject to terms and conditions). Any Loans which are held will first need to be sold via the Resale Marketplace, which are subject to finding a willing buyer.
No, cash in your Invest & Fund IFISA account will not earn any interest.
You may switch providers for innovative finance or cash or stocks & shares ISAs, or vice versa, by transferring your existing ISA to a new ISA manager.
You will be able to complete our online Transfer-In Form to transfer existing ISAs into your Invest & Fund IFISA.
Once you have completed the online Transfer-In form, this will need to be printed, signed and posted to the address detailed on the form.
You can transfer your ISA at any time, you do not have to wait until the end of the tax year. You will be able to complete our online Transfer-In Form to transfer existing ISAs into your Invest & Fund IFISA..
Once you have completed the online Transfer-In form, this will need to be printed, signed and posted to the address detailed on the form.
If you decide you no longer want an innovative finance ISA, you will have the right to cancel your account within 14 calendar days of the date your account is opened. If you cancel within this period, you will remain eligible to open an innovative finance ISA with us or another ISA manager. You will also not have used up any of your current year subscription. This will not apply if you cancel your innovative finance ISA after this period.
If you have successfully bid in any Invest & Fund loans during this period and subsequently decide you no longer want an IFISA with Invest & Fund, the loan will be transferred to your standard account and you will lose the benefits of the Isa wrapper.
If you choose to cancel your innovative finance ISA, any loans and cash credited to your ISA account will be transferred to a regular Invest & Fund account. Any Loans which are held will first need to be sold via the Resale Marketplace, which are subject to finding a willing buyer.
The survivor will receive an additional ISA allowance equal to the value of the deceased ISA at the time of death (in addition to their own annual ISA allowance).
This is specified by the lender and contained in Appendix 1 of the Bidding Mandate agreement.
This is specified by the lender and contained in Appendix 1 of the Bidding Mandate agreement.
A fair description and illustration of the likely actual return is provided towards the front in the Credit Summary and takes into account fees, default rates and taxation.
You will receive a link to this document via e mail for each loan purchased through the mandate agreement.
These are detailed in the relevant Credit Summaries.
I&F has only two risk categories of loan: Senior and Junior. Both are priced to reflect prevailing market conditions. All loans purchased through mandate agreements are classified as Senior loans.
Given the greater risk of capital loss associated with Junior loans these are not eligible for purchase through mandate agreements.