Bonds designed to offer a higher rate of return than typical Cash ISAs
Crowdfunding firm Crowd for Angels has launched its first ‘crowd bonds’, specially created secured, high interest products which are eligible for its new Innovative Finance ISA (IF-ISA).
Introduced by the government in April last year, the IF-ISA allows investors to earn tax free* income on crowdfunded debt securities.
One of the first companies to issue crowd bonds to investors on the Crowd for Angels platform is PayitMonthly – a company which helps SMEs offer their customers interest-free finance – which is raising up to £200k at a rate of 9% per annum, paid monthly.
This is one of the first crowd bonds launched by Crowd for Angels which is eligible for its new IF-ISA. The bonds have been designed to offer a higher rate of return than a typical Cash ISA and, providing a further degree of protection, are secured against assets of the borrowing companies or other assets.
Tony De Nazareth, CEO and Founder of Crowd for Angels, said: “With interest rates on Cash ISAs currently at all-time lows, we expect to see high demand for our crowd bonds. Investors who are willing to take on extra risk by lending to companies have the opportunity of making tax free returns of up to 9% per annum on our asset backed bonds, which compares to an average interest rate of just 0.64% on a Cash ISA.”