Folk2Folk launches 'local' IFIsa

Folk2Folk has announced the launch of its Innovative Finance Isa (IFIsa), which will allow investors to support local businesses while earning tax-free interest on their loans.

The IFIsa lenders will earn either 5.5% or 6.5% pa tax-free interest – depending on the loans available for investment – which will be paid into their bank accounts monthly. 

There will be an annual administrative fee of 1% plus VAT, which will be payable by lenders to manage their IFIsa through the peer-to-peer lending platform.

The Folk2Folk IFIsa is currently only available to existing lenders for the investment of new money. 

New lenders will be able to gain access to the Folk2Folk IFISA from 1st August.

The platform will also soon be accepting ‘transfers in’ of current Isa funds held with other providers.

A minimum investment of £20,000 has been introduced, meaning that the Folk2Folk IFIsa will require lenders to use their full 2017/18 Isa allowance.  

All Folk2Folk business loans are secured against land/property.

Jane Dumeresque, CEO of Folk2Folk, said: “We’re delighted to give our lenders the opportunity to earn tax-free interest from their Folk2Folk loans.

“It’s something our lender community has asked for since we began our journey in 2013 and it’s something to be excited about.

“The launch of our IFIsa comes at a time when investors are starved for yield, with most interest rates set well below inflation.

“At Folk2Folk, we’re able to offer consumers an alternative income opportunity; one that now provides welcome tax-free interest earned through the Isa wrapper.

“We believe our IFIsa returns will not only offer a source of monthly income for investors – enabling them to support their lifestyles and achieve their financial goals – but also encourage more people to support and lend to local UK businesses.”

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