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Six reasons to invest with LendingCrowd

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LendingCrowd has a range of peer-to-peer (P2P) investment options, allowing you to choose the one that best suits your needs. All three of our accounts can be held within our Innovative Finance ISA (IFISA) wrapper, so you won’t have to pay tax* on your returns.

Use our passive Growth ISA or Income ISA to automatically create a diversified portfolio of asset-backed business loans, or take an active approach by selecting individual loans with our Self Select ISA. Read on to find out how we can help you achieve your investment goals.

1. Earn a target-beating return by lending to British businesses

Every month, more and more investors are signing up with LendingCrowd to access new investment opportunities and earn a target return of 6%** or more a year with our Growth ISA. It takes just minutes to set up an account, deposit funds and begin lending to creditworthy borrowers. All of the businesses on our platform are assessed by our in-house Credit Team, who have more than a century of combined credit analysis experience.

Thanks to this rigorous approach to credit quality, investors in our Growth ISA have achieved an average return of 8.5% – well above target. Please note that past performance does not guarantee future returns. As an investor, it’s important to remember you’re lending to businesses so your capital is at risk.

2. Make your money work harder to beat inflation

In an era when interest rates on cash savings remains extremely low, traditional bank and building society accounts continue to disappoint. According to personal finance data provider Moneyfacts, the average rate for a one-year Cash ISA stands at just over 1% – well below the rate of inflation, which stood at 2.7% last month, higher than the Bank of England’s 2% target. This means that cash held in many savings accounts is actually falling in value once the rising cost of living is taken into consideration.

3. Diversify your investment to minimise risk

Diversifying your portfolio is the best way to help manage risk. In other words, don’t put all your eggs in one basket. Our Growth ISA and Income ISA, both of which can be held within the same tax-free* IFISA wrapper, automatically spread your money across as many businesses as possible on our Loan Market. This means the impact on your return from bad debt is reduced if a business can’t repay its loan†.

The longer you hold a Growth ISA or Income ISA, the more diverse your portfolio will become, as these accounts automatically reinvest in additional loans.

4. No fixed investment term

All of our accounts are fully flexible, giving you control over your money. You can withdraw funds at any time by selling some or all of your investments on our Loan Market. Please remember that the ability to sell your investments depends on other investors buying your loans. There’s a 1% fee for capital withdrawals from our Growth ISA and Income ISA, and a 0.5% fee for selling loan parts from our Self Select ISA.

5. Tax-free* returns with an Innovative Finance ISA

Thanks to the introduction of the IFISA, you can invest up to £20,000 in P2P lending this tax year and you won’t have to pay tax on your returns*. You can invest a minimum of £1,000 in our Growth ISA and Income ISA, which have target returns of 6%** and 5.6%** respectively. If you want to take an active approach, you can invest in our Self Select ISA from as little as £20 and lend to individual businesses at rates from 5.95% to 16.25%††.

6. Benefits for the British economy

In an environment where many small businesses struggle to raise finance from banks, alternative finance providers such as P2P platforms are playing an increasingly important role. This has been recognised by the UK Government, the Financial Conduct Authority and HM Revenue & Customs through the launch of the IFISA and the backing of P2P lending by the British Business Bank.

Find out more about our range of ISA options.

*Tax treatment depends on the individual circumstances of each investor and may be subject to change in future.

**Capital at risk. Target rate is variable, net of ongoing repayment fees and bad debt.

†As an investor, it’s important to remember you’re lending to businesses so your capital is at risk. LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

††Investors can lend at rates between 5.95% and 16.25% based on LendingCrowd’s Credit Bands. Interest rates are guided by the credit grading allocated to each loan. Higher-risk investments may yield greater returns but can also lead to lower returns if the business can’t fully repay its debts. This is known as bad debt. Find out more at our Risk matters page.

Article author

Gareth Mackie

Gareth Mackie

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If you invest through LendingCrowd you should understand that your capital is at risk.

LendingCrowd is the trading name of Edinburgh Alternative Finance Limited, Company Number SC468392, authorised and regulated by the Financial Conduct Authority (Firm reference number 670991). LendingCrowd and its products are not covered by the Financial Services Compensation Scheme.

Read more about the risk involved when investing and borrowing.

The company's registered office is 23 Manor Place, Edinburgh, EH3 7DX.

Copyright © LendingCrowd 2020. All rights reserved.

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LendingCrowd is working with the British Business Bank to help deliver CBILS loans to SMEs affected by the Covid-19 pandemic. Find out more: