The Innovative Finance ISA (IFISA) was launched in 2016 as a wrapper for retail investors to benefit from tax-free investments in peer-to-peer lending and crowdfunding.
According to the latest available data from HMRC, the IFISA market passed the £1bn in the 2019/2020 tax year, but most of these offer peer-to-peer loans rather than bonds.
Here are the eight that are currently offering the IFISA wrapper around bonds.
Investors can start investing into Abundance’s green bonds with as little as £5. Available investments include funding for an indoor vertical farm and electric vehicle charging. Launched in 2012, Abundance has raised more than £100m so far. It offers a flexible IFISA and investors choose what projects they want to invest in.
Crowd for Angels
The minimum investment is £25 but companies can specify a higher amount if they want. Investors can invest in crowd bonds, which are secured and seek to return up to eight per cent per year. Many of Crowd for Angels’ crowd bonds offer monthly interest payments and have short durations, of around two to three years.
Focusing on environmentally-friendly businesses, Cyan Finance offers bonds from £100. The Cyan Sustainable Bonds have a term of three years, with an interest rate of 3.5 per cent paid quarterly. Bonds are issued monthly on the last business day of each month.
Downing bonds are made out to asset-backed businesses and target an interest rate of between 2.25 per cent and seven per cent per annum. The company has raised nearly £173m so far and has repaid more than £134m to investors. The bonds have delivered an average return of 5.28 per cent per annum. IFISA-eligible investments range from care homes to solar farms.
Recent Ethex bond offers have included electric vehicle company EZ-Charge, homelessness non-profit Greater Change and renewable electricity-powered charging point provider Charge My Street. Currently available investment opportunities have a range of returns forecasted, up to six per cent per annum. Ethex is also one of the founders of Energise Africa, which provides bonds for renewable energy projects in Sub-Saharan Africa, with a target return of up to six per cent.
With a minimum investment of £1,000, financing is provided across a portfolio of secured projects, mainly in residential property. With a target return of up to 7.75 per cent, investors can choose between a two-year or four-year bond.
Triodos only offers impact investments, which are available through the bank’s crowdfunding platform. It has so far raised more than £167m to fund 70 projects for 43 organisations. Investments include charity bonds, renewable bonds and sustainable bonds offering up to seven per cent.
Retail and sophisticated investors can invest in bonds issued by professional sports franchises through the Tifosy investment platform. It also runs a secondary market where members can trade securities from one another. There is limited information on the firm’s website about the investments on offer, but previous bonds have included a five-year bond issued by the Queens Park Rangers, targeting an 8 per cent interest per annum.