Money&Co.: Brings Lenders And Business Together

Money&Co

Money&Co. Brings Together Established Businesses Looking To Raise Funds With People Looking To Maximise Returns On Their Capital

Money&Co. Brings Lenders And Businesses Together

Money&Co. is a peer-to-peer business lending platform which arranges senior debt for established businesses.  Money&Co. brings together lenders looking to earn an attractive return on their cash with companies keen to borrow money without the expense and hassle of a bank.  Companies make loan requests through the Money&Co. website and lenders then bid for the loan and the income it generates. 

What Return Can You Expect On Your Cash?

Money&Co. attributes a credit rating to each company approved for a loan. These ratings range from A+ to C+ and provide a guide to the interest rate on the loan, with A+ companies expected to pay around 7 per cent and C+ around 11 per cent. A well-diversified portfolio of loans could therefore generate a gross interest rate of around 8 per cent per annum. After allowing for Money&Co.’s annual fee of 1 per cent and another 1 per cent for potential bad debts, you could expect to receive a rate of around 6 per cent per annum, although this return and the full return of your capital is not guaranteed.

How Does Money&Co. Select The Loans?

Money&Co.'s experienced credit team subjects each application to a rigorous financial stress test. All companies must be profitable and have at least three years’ filed accounts. Borrowers are good quality SMEs who would traditionally have received bank finance.  All loans are ‘senior’, secured with a debenture, and range from £100,000 to £3 million or more. Money&Co. has a sophisticated credit analysis system and a robust Credit Committee.

How Is The Interest Rate Set?

Lenders set the interest rate via an auction. Once a loan is approved and rated, it is posted on the Money&Co. website and lenders can bid. When the auction ends, the company decides whether to accept the average rate. If the bid is successful, each lender receives the rate asked for, irrespective of the average rate.

What Are The Terms Of The Loan?

Companies can request loans from one to five years. Money&Co. has a loan market, which enables lenders to sell part or all of a loan before the end of the term, subject to demand. Companies make monthly repayments, which include part repayment of capital and interest. If a bad debt arises, Money&Co. will pass the loan to a debt recovery company. If no money is recovered, the loan will be written off and lenders will lose their money. Money&Co. would emphasise that it only expects this to happen with 1 per cent of loans.

Who Is Behind Money&Co.?

Money&Co.’s CEO is the well known fund manager, Nicola Horlick. 

Visit the Money&Co. website for full details.

SIPP And SSAS Lending On Money&Co

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Crowdfunding And Peer-To-Peer Risk Warning

When a platform has been assessed and approved by a SIPP or SSAS operator, this does not imply that any loan or investment opportunity is endorsed in any way. A SIPP or SSAS operator's due diligence review is limited to ensuring the processes and procedures of the platform are in line with both FCA and HMRC principles.  It's entirely your responsibility for carrying out your own due diligence on any loan or investment opportunity before agreeing to lend or invest your pension money on a platform. As a SIPP or SSAS operator will continually review platforms from a regulatory perspective, it's possible for a platform to become 'unapproved' if something changes.

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