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Crowd2Fund Opens Up About Its IFISAs
Finally, 4thWay has enough information to list in our comparison tables, for the first time and not for the lack of trying, one of those rare of P2P lending things: an IFISA product. These offer completely tax-free P2P lending.
Like Willy Wonka's golden ticket, there are only five of them currently released or imminent.
The IFISA product we now list is from Crowd2Fund*. This has proved popular with lenders in 2016 particularly since it was also the first IFISA ever to launch. As usual, our experts got under the bonnet with Crowd2Fund, prodding, poking, questioning and interviewing them to acquire well over 100 details.
You can always look into many of the details later if you want**, but here, without further ado, is one of our Quick Expert Reviews on Crowd2Fund and its IFISA product:
Crowd2Fund Quick Expert Review
“Impeccable early results; interesting model for finding prime borrowers.”
Crowd2Fund, which started in 2015, is still very small, barely hitting seven figures in lending, but it is now growing very rapidly and offering more and more lending opportunities. Its products are available in an IFISA.
You can lend in Crowd2Fund’s business loans and receive monthly loan and interest repayments. You can also lend to businesses through bonds, whereby you receive interest only each month and get your entire loan back at the end. Finally, Crowd2Fund offers you “revenue loans”, which means the borrower pays back more or less each month based on how much the business borrower is making. Bond interest rates are higher than business loans and revenue-loan rates are higher than bond rates, because of the extra risks.
While Crowd2Fund has a key person with at least some directly relevant experience in business lending, we would like to see it hire more experience. Its processes for borrower selection include most things we would expect, with a focus on accepting businesses that are making enough money each month to meet loan repayments – and then some. It offers loans to businesses with just one year’s trading history (six months in the case of revenue loans). While this is on the short side, the businesses all have to be making money.
Crowd2Fund says it attracts quality borrowers, uniquely, by actively contacting healthy businesses and encouraging them to borrow to fund new projects, i.e. it doesn’t do loans to help businesses struggling to cover costs.
We want to see Crowd2Fund start to do risk modelling based on numerical data. We expect this for business loans platforms.
Crowd2Fund is above average on transparency, sharing a lot of information with us, although its information on bad debts is often several months out of date.
So far, Crowd2Fund* has reported no bad loans and negligible late loans. If this record continues, we think current interest rates are likely to prove generous.
Crowd2Fund received £2 million in funding from investors in 2016 and as expected it burned through this quickly. Crowd2Fund is new and it is far from clear whether it will grow quickly enough to survive. As a regulated platform it must have plans and cash set aside to wind down existing loans in the event it goes bust. Its accounts show that the CEO has borrowed approaching £100,000 from the business.
Crowd2Fund also offers an investment product where you can buy shares in businesses and another where you can make donations. We do not analyse those two products simply because they are not P2P lending.
Read our comprehensive IFISA Guide to see a full list of available IFISAs.
This is an opinion and not a recommendation. Please conduct further research of your own. Read our full disclaimers.
*Commission, fees and impartial research: our service is free to you. 4thWay shows dozens of P2P lending accounts in our accurate comparison tables and we add new ones as they make it through our listing process. We receive compensation from Crowd2Fund and other P2P lending companies not mentioned above either when you click through from our website and open accounts with them, or to cover the costs of conducting our calculated stress tests and ratings assessments. We vigorously ensure that this doesn't affect our editorial independence. Read How we earn money fairly with your help.
**To see a lot more details on Crowd2Fund, visit our comparison tables, select the checkbox next to Crowd2Fund and then click the button “Get more details” at the top or bottom of the page.